The cryptocurrency market continues to be under pressure, Bitcoin has stabilized above $42000, but the risk of another decline is still not over. This situation also negatively influences the price of Filecoin FIL/USD, Tezos XTZ/USD, and Cosmos ATOM/USD, and traders should be very careful when opening their positions.
The prices of these three cryptocurrencies can weaken even more if the negative trend continues, and traders should consider that if Bitcoin falls again below the $40000 support, it would add further pressure to the whole cryptocurrency market. The fallout from the Evergrande also has a negative influence on the market; the company is on the brink of collapse, and people are particularly risk-averse when the economic stability is in question.
“The downturn in the crypto market is nothing but investors rushing to liquidate their crypto funds for fear of China’s crisis disrupting the largest global financial balance. We will continue to see everyday investors and financial institutions utilize cryptocurrencies and validate the underlying value proposition of digital assets over the long term,” said Bobby Zagotta, US CEO of crypto exchange Bitstamp.
One of Switzerland’s leading banks, UBS, recently warned its customers that the cryptocurrency market is a very speculative market that poses significant risks. It is also important to mention that the Swiss Financial Market Supervisory Authority has proposed a ban on anonymous cryptocurrency transactions in an attempt to clamp down on money-laundering transactions.
The European Union has also proposed a ban on anonymous cryptocurrency transactions in July 2021, and according to UBS, cryptocurrency regulations might negatively impact the market. All crypto providers will have to apply EU rules which means that all cryptocurrency transactions must record customer names and information.
Filecoin (FIL) continues to trade close to $50 support level
Filecoin has weakened from $120 to $50 in less than four weeks, and the current price stands around $54.
If the price breaks the support level at $50, it would be a very strong “sell” signal, and the next target could be around $40. Filecoin remains in a bear market, and traders should use “stop-loss” and “take profit” orders when opening their positions because the risk is currently high.
Tezos (XTZ) remains under pressure
If the price falls below $6 support, it would be a strong “sell” signal, and the next target could be around $5. The risk of further declines is probably not over, but if the price jumps above $7.5, we have the open way to $8 resistance.
Cosmos (ATOM) has extended its correction from the record highs above $44
Cosmos (ATOM) has extended its correction from the record highs above $44, but it would be a signal to buy ATOM if the price jumps above $45 resistance. The next price target could be around $50 or even above; still, if the price falls below $30 support, it would be a strong “sell” signal.
Summary
The cryptocurrency market continues to be under pressure, Bitcoin has stabilized above $42000, but the risk of another decline is still not over. The fallout from the Evergrande also has a negative influence on the market, while UBS warned its customers recently that the cryptocurrency market is a very speculative market that poses significant risks.
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from Market Analysis – Invezz
