Contents
- XRP fails to break massive resistance
- The main reasons behind the end of short-term recovery
Crypto Market Review, July 21
Arman Shirinyan
Numerous altcoins are being rejected at key resistance levels, but the market still looks healthy
The seven-day mining rally appears to be over as the majority of the cryptocurrency market slows down. The biggest digital assets have already lost around 5% of their value, including Ethereum, Bitcoin and XRP.
XRP fails to break massive resistance
The 20% rally XRP has shown us in recent days did not turn into a full reversal as some market participants expected. Unfortunately, the coin stalled at the local resistance level of $0.4.
Coincidentally, the psychological resistance level remained around the 50-day moving average which acts as a serious barrier for assets moving in a sharp downtrend. A successful breakout would have pushed XRP to the next resistance in the 200-day moving average, resulting in at least a 30% price increase.
For now, the market expects an accelerated downward reversal as the positivity on the industry evaporates and inflows slowed significantly.
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The main reasons behind the end of short-term recovery
There are three fundamental reasons and one technical reason that could have pushed the cryptocurrency market back to the $1 trillion threshold.
The “macro” reason would be the European Central Bank’s first rate hike since 2011. The majority of financial analysts expected a similar decision from the European regulator, considering the rise in inflation that caused the parity of the euro with the US dollar, which is something we have not seen in recent 20 years.
In addition to the rise in interest rates that could push some investors away from risky cryptocurrency assets and lead to a migration towards safer options such as bonds, major companies are also shedding their holdings of digital assets.
Elon Musk’s Tesla stated in its latest earnings report that it has sold 75% of its Bitcoin holdings worth approximately $900 million. The news almost immediately caused a 3% drop in Bitcoin and other cryptocurrencies, making the fact that the company shed most of their holdings insignificant.
The technical reason behind the plunge in the cryptocurrency’s market capitalization could be that the majority of assets faced resistance levels, including the aforementioned XRP.
Ethereum, Cardano and Solana tried to break the resistance earlier, as we mentioned in our previous market review. Unfortunately, the lack of inflow and volume prevented cryptocurrencies from going through, which is why we are seeing a short-term reversal today.
