The anticipated cryptocurrency crash over the weekend came to pass with rising rumors of an attack on Iran. Bitcoin lost its initial target of $78,000, continuing to close below $80,000. Although altcoins saw losses exceeding 10%, Bitcoin’s fall has temporarily paused, allowing a slight recovery from the bottom. Is the fall really over?
Bitcoin’s Decline
The recent drop was influenced by President Donald Trump’s selection of Kevin Warsh as the next Federal Reserve chair. With discussions of candidates like Hassett and Bessent, Warsh emerged as a less-than-ideal choice. Known for his lukewarm stance on monetary expansion and potential delay of QE despite rate cuts, Warsh’s announcement increased the negativity within the crypto markets after the statement on Friday.
Adding to this negativity were Producer Price Index (PPI) figures that exceeded expectations, with potential attacks on Iran being the cherry on top. President Trump made such unprecedented moves that if the new Fed chair rapidly slashes rates, it could spark questions regarding the Fed’s independence. Everyone knows the turbulent times experienced with Powell and Cook.
Liquidations in the last 24 hours exceeded $2.58 billion. While open positions dropped by 10%, total volume increased by half. When volume rises but prices fall, it indicates an escape. This is precisely what was observed in cryptocurrencies.
Will Cryptos Rise on Sunday?
After every massive sell-off, a brief recovery is usually expected in cryptocurrencies. Even if the decline is to continue, a short-lived peak and then the resumption of sales with a new wave are anticipated. For Sunday, this scenario can be described by the movement toward CME closure.
Thus, we can expect a new attempt by the BTC price to approach 83-84 thousand dollars as daily closure progresses. If $80,600 can be maintained as support, gains might increase as of Monday, and BTC could move into the 85-88 thousand dollar range for a higher peak. For now, the most plausible scenario seems to be recovery towards CME closure as the day progresses.
Will the trend change? Bitcoin is clearly in a downtrend now, with bears targeting the $56,000 level.
RIVER continues the day with a 34% loss. Trump’s project WLFI and IP suffered 17% losses, while JUP leads with a 14% loss among the top 100 cryptocurrencies.
