As Bitcoin[1] slipped on the charts, it took the entire cavalry along with it. From a technical standpoint, BTC can be expected to consolidate over the next couple of weeks as altcoins supposedly take charge. However, the narrative flips fast in the crypto-industry.
In line with these corrections, we can take a look at Ethereum[2] and Cardano[3] to identify if the crashes were actually surprising or possibly expected.
Ethereum and Cardano – How was the curry spilled?
Source: Trading View
The market turnaround was definitely a surprise for Ethereum. Before the 9.4% drop on the charts, ETH[4] recovered earlier in the day to record a position above the resistance of $4,238. However, the crypto-asset was unable to consolidate long as a cascade of possible liquidations led to an enormous drop-down under $4,000.
Source: Trading View
With Cardano, it might have been less surprising. Since the 3rd week of September, ADA has been consolidating between the price range of $2.30 and $2. Since 10 October, the price has hovered under the 20-moving average on the 1-day chart. Many in the market were expecting the same to be breached soon.
However, ADA breached the bearish side of the horizon, hitting a floor price of $1.81 and dropping by 15.62%.
Over-excitement, what else?
Source: CryptoQuant
24 hours before the drop, it was observed[5] on CryptoQuant that all exchange estimated leverage ratios for Ethereum reached a point of overheating. The same has been identified during previous corrections.
The aforementioned leveraged ratio was last recorded on 3 September when Ethereum dropped by 25%, from $4000 to $3000.
Source: Skew
Other than that, the ETH/BTC 6-month Implied Volatility[6] also hit a 3-month high, indicating that traders are more
