Bitcoin, Ether, XRP price analysis 23 May 2019: Tough to panic
Traders are very ready to hit the sell button, but they're equally happy to grab perceived bargains.
The crypto markets have experienced a pullback today, leaving market-watchers wondering whether this is the start of a much bigger slide or if crypto is just going through a healthy readjustment.
While the markets as a whole are trending together today, Bitcoin (BTC), Ether (ETH) and XRP (XRP) are all being affected slightly differently.
Yesterday we observed that the markets were tightening up and seemed to be getting close to doing something or other. And something did happen.
Bitcoin crested $8,100 yesterday, and traders were quick to pocket profits when it happened. This saw prices quickly drop back, and then after a single bounce, they started leaking downwards. After leaking to about $7,800, Bitcoin once again popped to $8,000. That second jump was the catalyst for a bigger drop as more selling pressure joined the market.
And while the tasteful green overlay (Bollinger bands) is, in this case, probably more retrospective than predictive, it highlights just how eager the bargain hunters were to buy that big drop. The lurching prices may have shaken a few people out of the market, but it seems Bitcoin isn't in immediate danger of a death plummet.
ETH (dark blue) and XRP (light blue) are following Bitcoin in the traditional crypto way by imitating its movements in an exaggerated way – kind of like they're standing behind Bitcoin's back making fun of it and then acting nonchalant when it turns around.
Over the last 24 hours they've averaged out to almost identical price movements, dropping 7% to 7.5% each. But over five days they've managed to end up several percentage points apart. That they can both do nominally the exact same thing but still end up deviating significantly means it's worth looking at them side by side to see where and why they're diverging.
In recent days, the main place ETH got its edge over XRP was from higher rises on 21 to 22 May.
This coincided with the Ethereum Foundation's announcement of a $30 million commitment to building out ETH 2.0. This refers to the much more scalable future version of Ethereum. The markets may have interpreted this as a bullish long-term signal. So, as prices were naturally rising across the market anyway, Ether picked up a slightly larger share of the rise.
But, as you can infer from those other lines (the 50-day and 200-day moving averages) snaking across the chart, the impact of this particular event was still minimal next to the usual market stuff.
If you think of those lines as an indication of how Ether is performing against its own price history, you can see that in the bounce prior to the news – when it was simply matching XRP – ETH outperformed itself much more than it was when it actually started outperforming XRP.
The Ethereum Foundation's re-commitment may not have been the most market-oriented piece of news, but it might be just enough to highlight how much the crypto markets are still driven by short-term speculation.
Disclosure: The author holds BTC, BNB, ATOM and IOTA at the time of writing.