Bitcoin And Ethereum Drop Nearly 3% Due To China Quarantine: Should You Buy?

The main cryptocurrency, bitcoin, failed to break out of the descending triangle and lost over 3% to $16,160 in the last day in a market dominated by concerns.

Similarly, Ethereum is following the same trend as Bitcoin, with a drop of almost 5% to $1,171 on the morning of November 28th.

Crypto Market Cap Update

The capitalization of the global cryptocurrency market decreased by more than 2% to $815.32 billion, and the total market volume reached almost $42 billion, which is 22% more than the previous day.

In this exchange volume, the total DeFi volume is $2.60 billion, or 6%, while stablecoins account for almost $39 billion of transactions, or 93% of the daily amount.

The most notable gains and losses in the market

However, in this bear market, we can notice a noticeable increase in 3 cryptocurrencies:

  • Celo (CELO): Up over 34% to $0.6970.
  • Apecoin (APE): Up over 13.5% to $3.70.
  • UNUS SED LEO (LEO): Up nearly 7% to $3.90.

Best and Lost Altcoins – Source: Coin360

However, there are many cryptocurrencies that are giving way. Among them, the following three should be noted:

  • Aptos (APT): Losing over 5.5% and trading at $4.65.
  • Trust Wallet Token (TWT): 4% decline to $2.
  • Lido DAO (LDO): More than 3% down to $1.09.

Quarantine in China provoked massive sales

Cryptocurrencies are falling on Monday morning, which indicates the nervousness of investors. They are concerned about protests in China against Covid restrictions.

Officials in at least eight cities tried Sunday to crack down on protests that posed a direct threat to the ruling Communist Party.

Dissatisfaction with President Xi Jinping’s famous anti-COVID policy that lasted nearly three years has sparked a wave of public disobedience.

The world’s second largest economy is also feeling the impact of COVID-19 regulations. The protests now engulfing cities like the capital Beijing and dozens of university campuses show widespread dissatisfaction with the ruling party for decades and the current situation.

Protesters in Shanghai calling for Xi’s resignation and an end to one-party rule were dispersed by police with tear gas canisters but returned hours later. Some were arrested to be put on a bus as police broke up the protest again.

What does China have to do with the fall of the cryptocurrency?

China, as the world’s second largest economy, has a significant impact on global financial markets of all types. In addition, investors are looking for safe investments to protect their investments during times of crisis.

Stocks and cryptocurrencies are not considered a safe haven, which is why we are seeing price declines today.

However, if the situation in China improves and the protests stop, we could see a sharp bullish reversal in Bitcoin and other currencies.

bitcoin price

With a current price of $16,174 and a 24-hour trading volume of $25 billion, bitcoin is down over 2.5% in a single day. Its capitalization now stands at $310 billion against $318 billion yesterday.

Bitcoin price and tokenomics – Source: coinmarketcap

BTC reached the resistance level at $16,600 and started to fall again. The price formed a descending triangle pattern within 4 hours, which usually results in a downtrend.

Bitcoin is now moving towards the nearest support level of 16,000, which could trigger a decline to $15,650 if it drops below.

Bitcoin price chart – Source: Tradingview

Technical indicators such as RSI and MACD are in the sell zone, indicating a strong downtrend. The 50-day moving average highlights this trend and even indicates that it may be sustainable.

If the market rises again, a bullish crossover of the $16,450 resistance level could give Bitcoin the prospect of reaching $17,000 in just a few days.

Ethereum price

The current price of Ethereum is $1170 and the 24 hour trading volume is $5 billion. Ethereum has lost just under 5% in the last 24 hours and is valued at $143 billion with 122,373,866 coins in circulation.

Ethereum price and tokenomics – Source: coinmarketcap

The Ethereum Japanese candlestick chart has formed three black crows indicating a strong selling trend and the price is now below the resistance at $1210.

At $1,175, Ethereum crossed its 50-day moving average, signaling a strong sell signal. Its immediate support is now at $1,150.

The RSI and MACD indicators are also in the selling zone, suggesting that ETH could fall further towards support at $1,115.

Ethereum price chart – Source: Tradingview

Finally, in case of bullish behavior, a break of the main resistance at $1,185 could lift the price of ETH to $1,235.

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Cryptocurrency price tracker – Source: Cryptonews

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