The price of XRP, EOS, Cardano (ADA), and other major cryptocurrencies have dropped by more than eight percent on the day, causing the total crypto market cap to fall by 27 percent in merely two months.
EOS, in particular, increased from $2.6 to $3.69 in a span of a week in early November, by almost 42 percent.
However, the upside momentum of most alternative cryptocurrencies was short-lived, especially XRP and Ethereum, which have historically led the altcoin market, plunged following Bitcoin’s big drop.
Is a bigger drop likely?
It is difficult to determine a single driving factor for the decline of the cryptocurrency market if the downside movement occurs in an extended period.
Short term movements are often fueled by large margin trading platforms like BitMEX, but Bitcoin and major altcoins including XRP, EOS, and ADA have performed poorly throughout November for almost three weeks.
ADA, for instance, despite highly anticipated network updates around Shelley, dropped from $0.046 to $0.0358, by 22 percent from November 18 to 25, also within a week.
XRP has secured key partnerships in the third and fourth quarters of 2019, as Ripple’s deal with MoneyGram to bolster the usage of XRP on remittance networks.
Yet, the price of XRP has actually dropped year-to-date, as one of the few major cryptocurrencies to see a net negative 11 months into 2019.
The decline in the price of Bitcoin is likely caused by a combination of factors:
- sell-off of BTC by small miners;
- lowering volume in the latter half of the year;
- and futures markets showing more short contracts than long.
The price of Bitcoin has dropped below the breakeven point for miners and as such, some technical analysts anticipate BTC to test lower supports like $5,800.
If BTC continues to fall in the short term without strong relief rallies, in spite of technical indicators showing that major alternative cryptocurrencies are oversold, the sell-off of crypto assets could continue.
Can XRP, EOS, and ADA recover by the year’s end?
When the Bitcoin price tested $6,600 earlier today, the XRP price moved closer to its $0.19 support level, which technical analysts like DonAlt have been closely observing
$0.30 was quite important, let's hope $0.19 will be as well.
The price action on XRPUSD is uncannily technical. pic.twitter.com/gJyzZeRYbm
— DonAlt (@CryptoDonAlt) November 22, 2019
A minor drop of the Bitcoin price to the low-$6,000 region in the upcoming days could easily push altcoins below key support levels, making it significantly more difficult for XRP, EOS, ADA, and others to recover by the end of 2019.
The steep fall of altcoins after being down by well over 90 percent from their record highs could also demonstrate that investors are dismissing oversold conditions of most crypto assets as the cryptocurrency market continues to see a steep sell-off.Posted In: Cardano, EOS, XRP, Altcoins, Analysis