Ethereum (ETH) and Cardano (ADA) are having good times in the market. And both can be serious problems for Bitcoin (BTC) in the long term, according to trader Augusto Backes.
During a broadcast on Tuesday (25), Backes talked about three cryptocurrencies… He also dismissed the view that China and Elon Musk were responsible for the recent market downturn.
About ETH and ADA
On the chart, Backes said ADA has a very short-term correlation with BTC. If the largest cryptocurrency by market value resumes its growth, the ADA could go that route.
“Cardano for $ 1.53 is cheap. It was $ 2.50 a week ago. She is in the lateralization phase. On the weekly chart, it remains in a strong uptrend. This, of course, depends entirely on BTC, ”he explained.
However, if BTC falls below its current level and reaches the next support at $ 23,000, the ADA could suffer as well. A further drop could push the price up to $ 0.50.
In this case, what Backes classifies as one of the best buy points in cryptocurrency history will be revealed.
In the case of ETH, great expectations are associated with the launch of Ethereum 2.0. However, the delay in starting the project can be a problem.
The initial deadline for full implementation is half of 2022, and this could give Cardano some market share Ethereum…
Competition between the two cryptocurrencies could result in BTC, especially in the long term. For a trader, one of them may surpass the current market leader in the future.
Support for new BTC
Backes notes that these movements, called “smart money”, can be read on the chart. Meanwhile, a small investor can take advantage of the support of these operations to make a profit.
In his analysis, he points to $ 35K, $ 22K and $ 18K regions as possible new supports for BTC. The latter also has a large number of leveraged positions that need to be settled.
Leverage fault
For Backes, the price of BTC has skyrocketed in recent months. The rise has sparked over optimism in many traders, which started to work with a strong debt load.
In addition, many brokers offer trading options with up to 100x leverage. In this scenario, small investors usually pay the highest price.
“When the market wants to get liquidity, be it large investors, funds or institutions, they are interested in the price going against the trend. They often seek to destroy young children, as this feeds the market and gives it liquidity, ”he concludes.
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