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During the previous days, sentiment in the crypto market was really positive and all the charts pointed to the beginning of a bullish trend. Bitcoin broke the final line of the bearish trend, Ethereum stopped near a new all-time high, whereas other altcoins were gaining in value. Only experts at JPMorgan said that such a rise could not be healthy and warned about a bubble. Several days later, the crypto market collapsed by 16%, leading to significant losses and pushing coins to the nearest strong support levels.
Notably, experts at JPMorgan doubted the fundamental nature of altcoins' bullish trend. Analysts suppose that a surge in altcoins was caused by the abnormally high interest from retail traders and was of speculative nature. As a result, a bubble appeared. It burst on September 7 and led to a local collapse of the market.
A lot of positions worth more than $3.5 billion were closed at the largest cryptocurrency exchanges in just a few hours. The largest loss per order was logged in the pair with Bitcoin and totaled $43.7 million. Those who traded Ethereum lost more than $715 million, whereas traders of XRP lost $148 million. The biggest trading platforms faced disruptions due to the rapid fall in the price of assets, which provoked even greater panic and accelerated the market decline.
In the last 24 hours, Bitcoin depreciated by 14% and declined to $45 thousand. Yesterday, the asset reached the local peak of $52.5 thousand. At 12:00 (Moscow time), the asset was trading at the reading of $45.5, where the support level was formed. As a result, buyers began pushing the price higher. The daily trading volumes of the coin remain high, around $65 billion. Although bulls are regaining control over the market, daily technical indicators still point to a downtrend. That is why the decline in Bitcoin is likely to stop near the area of $42-44 thousand, where new market players will enter the market. However, the massive sell-off will continue in the short term.
In the last two days, Ethereum made a breakthrough and stopped near $4 thousand. The coin did not have enough time to consolidate at this level due to the market collapse. As a result, in the last 24 hours, the asset slumped by 16%. At 12:00 (Moscow time), it was trading at $3.2 thousand. The crypto asset broke several important support levels and stopped falling near the key level of $3.3 thousand. On the one-hour chart, the quote began recovering. However, on the daily chart, the downward dynamic is obvious. However, there are signs of the trend reversal.
Meanwhile, Ripple was trading at the level of $1.4 and was expected to show a jump. However, just in one day, the asset nosedived by 22.8% and reached the key support level. After the slump, the coin started recovering. On the one-hour chart, we can see the beginning of the consolidation period. However, on the daily chart, the price is not moving that actively. Stochastic, RSI, and MACD completed the downward movement and started to signal a rise in buyers' activity.
Summing up, we can see that a local bubble was formed in the market. It was caused by the abnormal activity of retail traders. However, most cryptocurrencies have begun to show the first prerequisites of their recovery. The similar dynamic is observed in many altcoins, but only on the hourly chart. This indicates the beginning of the consolidation phase. The current situation should be perceived as shock therapy and an opportunity to enter the market at favorable cryptocurrency quotes. Despite the breakdown of many important levels that cast doubt on the uptrend, bulls are still controlling the market. Therefore, the current phase could be the beginning of an upward movement.
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