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A crypto crash has plummeted in the past few days, erasing billions of dollars in value, with Bitcoin and top altcoins like Avantis (AVNT), Ethereum (ETH), and Ripple (XRP) plunging. This article explores why the crypto market crashed and whether these coins will rebound.
There are at least three main reasons why the crypto market crash is happening. First, the plunge happened because of forced liquidations of leveraged cryptocurrencies worth over $1.8 billion in the last 24 hours. The liquidations was up by over 800% from a day earlier.
Second, the crypto market plunged as profit-taking among investors accelerated after the Federal Reserve interest rate decision on Wednesday last week. Since most coins were up before the decision, the ongoing panic selling is part of a situation known as selling the news.
Third, the ongoing crypto crash is also happening after last week’s options expiry, and the fact that most recent rebounds have faced substantial resistance.
The Avantis crypto price has been one of the best-performing coins in the past few weeks as it jumped from $0.1268 to a record high of $2.6.
This jump was mostly because of the rising demand for perpetual exchange tokens and those in the Base Blockchain. Also, data shows that the volume in its exchange has soared and even crossed what it handled last month.
The 30-minute chart shows that the AVNT price has lost momentum in the past two days and has formed the highly bearish head-and-shoulders pattern. That is a sign that it will pull back during this crypto market sell-off and then resume the uptrend later this week.
The daily timeframe chart shows that the Ethereum price has jumped from the year-to-date low of $1,384 in April to a high of $4,945.
Recently, however, it has consolidated and formed a symmetrical triangle pattern. This pattern was part of the bullish pennant chart pattern, which often leads to more gains.
The bullish pennant was invalidated on Monday as the coin plunged below the lower side. On the positive side, this plunge was likely a shakeout, which normally precedes a breakout. Indeed, the coin has formed a hammer candlestick pattern, which is a common reversal sign.
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Therefore, the ETH price will likely lead to a strong bullish breakout, potentially to the year-to-date high of $4,945. A break above that level will point to more gains, potentially to $5,000 and above.
The daily timeframe points to a strong bullish breakout in the coming weeks. It has formed a falling wedge pattern, which is made up of two descending and converging trendlines.
XRP price has also formed a bullish flag pattern, which is comprised of a vertical line and a descending channel, resembling a hoisted flag.
Therefore, the coin will likely have a strong bullish breakout, potentially to the year-to-date high of $3.6565, which is about 30% above the current level. The bullish view will become invalid if it crashes below the lower side of the wedge pattern.
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