Our last report on the Crypto selloff was two days ago but two days is a long time in the Crypto market. Following the hefty sell-off that lasted for two days, despite negative news flow, cryptocurrencies made a sharp recovery on Thursday. News headlines from South Korea have continued, ranging from insider-trading accusations to admissions that shutting down crypto is “realistically impossible.” South Korean authorities are investigating a claim that employees who are part of a crypto regulation task force were trading ahead of government announcements. Furthermore, more than 200 thousand Koreans signed a petition to the government against a ban, which requires a response and may delay action. In addition, the Chinese Central Bank (PBOC) has taken further action by asking the payment institutions to stop providing services for the trading of virtual currencies.
Ripple broke lower and hit the 78.6% Fibonacci target identified in our previous report, where buyers have emerged resulting in a recovery. In the 4-Hourly log scale chart, XRP/USD has broken out of a trading channel to the upside but is capped by the 50MA and horizontal resistance at 1.67. The 38.2% Fibonacci of the entire decline lies at 1.78 and a break above this level is needed for the bulls to take control, with a possible move to resistance at 2.10. However, a reversal below 1.39, could result is a fresh test of the lows.
On the 4-Hourly log scale chart, Bitcoin broke the 11,500 level and continued to the downside to test areas below the psychologically important 10,000. Buyers emerged at around 9,300 and the recovery now sees BTCUSD trading back above 11,500. However, a break of horizontal resistance and confluence of Fibonacci at around 13,000 may be needed for a full recovery to take hold. While below 13,000, a retest of 10,000 and below cannot be ruled out. The 61.8% Fibonacci retracement at 8,100 remains a possible downside target.
