Crypto Market Review, December 7th

Arman Shirinyan

The market returns to a depressed state as the largest assets in the market bleed

The recovery in the cryptocurrency market ended on low levels, with most major assets falling below the thresholds they conquered during the cryptocurrency industry reversal. Unfortunately, easing selling pressure hit the scene with falling purchasing power.

Polygon volatility squeeze

Despite the massive price increase of 38% MATIC has technically been range-bound, with sudden breakouts along the way. At the same time, the price of Polygon’s token is at the same level as it was already in July, which brings the almost half-yearly return for MATIC at 0%.

MATIC diagram
Source: TradingView

Confusing price action aside, Matic might show us an unexpected spike in volatility for the foreseeable future as all the moving averages on the asset’s daily chart have been converging over the past few days. During spikes in volatility, assets can move irrationally and put significant pressure on their holders.

Ethereum gives up

Ethereum’s rally wasn’t the most notable event in the market over the past week. The second largest cryptocurrency on the market has actually gained traction and hit local resistance levels. But growth, supported by increased emissions and a declining burn rate, were hugely negative factors dooming this recovery.

For the past eight days, Ethereum has been consciously trying to climb back above the 50-day moving average that would open ETHs Way to gain a foothold above the $1,300 price point. Unfortunately, the above factors caused a reversal in the $1,200 price range and will most likely cause another downtrend until the bears lose the ability and funding to push ETH lower.

The most likely scenario from here would be full correlation with Bitcoin and the rest of the market as there are no major growth factors taking place in the Ethereum ecosystem. The previously reported rebound in the NFT industry appears to be having no impact on the second largest asset on the market.

Litecoin’s fearless struggle with the market

The digital asset industry’s classic crypto and silver have surprised investors with their explosive price action during the market depression. Since mid-November Litecoin has gained more than 50% of its value and has become one of the best performing assets on the market over the last 30 days.

However, LTC lost most of its momentum during the consolidation that began on November 30th. According to volume profiles, bulls failed to push LTC higher as some short-term holders started to take profits, creating strong obstacles for the rally to accelerate.

Additionally, we are seeing an increase in the number of large transactions worth $100,000 or more. Such dynamics could hint at upcoming profit-taking, which should be viewed as another bearish factor for LTC alongside the reversing cryptocurrency market.

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