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Market data is provided by the HitBTC exchange.

The trend in crypto continues to be down. After a period of low volatility, cryptocurrencies are again headed south. There are no takers for cryptocurrencies even after such a huge fall because money is moving back into the traditional safe haven, gold, according to Jan Van Eck, CEO of Van Eck Associates.

The demand for funds from crypto companies is on the rise. Michael Novogratz backed Galaxy Digital is planning to raise $250 million for loans to crypto companies by March. Most large investment banks and funds are dipping their feet into these companies but Nouriel Roubini still believes that blockchain “is no better than Excel spreadsheet.”

Iran wants to use cryptocurrencies to circumvent recent U.S. sanctions. The Islamic Republic plans to issue a state-backed cryptocurrency, which it hopes will bypass the existing global messaging system “SWIFT” that facilitates cross-border payments.

While we are upbeat on the crypto space for the long-term, the price action in the short-term continues to be depressing. The market has still not found a solid bottom and initiating positions in a downtrend is not a good strategy. How far will cryptocurrencies plunge? Let’s find out.

BTC/USD

Similar to the previous occasion in mid-Nov. of last year, the tight range in Bitcoin (BTC) has resolved to the downside. The bears will now attempt to break down of the yearly low at $3,236.09 and resume the downtrend, while the bulls will try to defend it.

View photos BTC/USD More

The price is below both the moving averages and the RSI is close to the oversold level, which suggests that the bears are in command. Every pullback is likely to face selling at the moving averages and above it at the downtrend line.

Below $3,236.09, the BTC/USD pair can fall to $3,000, which is a psychological support. If this level also fails to hold, the downtrend can extend to $2,600 and below that to $2,400.

Our bearish view will be invalidated if the digital currency rebounds sharply from $3,236.09 and stages a sharp recovery. We shall wait for the trend to change before recommending any trade in it.

XRP/USD

Ripple (XRP) plunged below the $0.30550 to the $0.31 support zone on Jan. 27, after which selling intensified.

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