Crypto markets fell sharply on Tuesday, putting a damper on hopes that the recent momentum is a precursor to a larger recovery. Interestingly, the declines are simultaneous with those in the global equity and commodity markets, although the two are not necessarily correlated, as observed in the past.
Bitcoin fell to as low as $340 on BTC-e, a loss of 5.6% since 24 hours prior. Combined with yesterday’s declines, it has shed 8.1% since some incredibly flat behavior over the weekend. It is not uncommon for such behavior to function as a “calm before the storm” (in either direction).
$340 is BTC’s lowest point since 18 days ago. At that time, $340 had taken on a role as a mid-term support point, from which it jumped back to $390. As assessed yesterday, any serious break past the mid-$350s entails further losses into the $340s. Should its $340 support point break as well, it can easily slide back to the low $320s.
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The bulk of the drop occurred within a three-hour period, during which volume levels were choppy and at one point exceeded 1000 BTC/hour, a one-week high.
The drop also sends BTC well below its 50-day moving average (MA) of $360, a move which appeared in the making after showing signs of struggling to keep its head above the mark.
Litecoin also fell sharply to an 18-day low of $3.42 on BTC-e. All of the top 10 cryptocurrencies, as ranked by market cap, were in the red by at least 4%–the lone exception being Ripple’s XRP, which was up by over 10%. Non-Bitcoin derived currencies have often gone against the tide during such markets, although XRP appears to be the only one doing so today as it continues its hot streak.