This article discusses the potential for a significant decline in altcoins following a recent bearish trend. Various factors, including the United Nations’ declarations, upcoming data releases, and statements from eight Federal Reserve members, have contributed to the week’s overall pessimistic mood. Despite the somewhat expected downturn, over $2 billion in liquidations have occurred, indicating a breach of critical levels. This leads to the question of ETHBTC’s current condition and whether the downturn in cryptocurrencies will persist into September.
Decline in Cryptocurrencies
Recently, the Federal Reserve’s updated stance and Powell’s remarks have been shared in detail. Trump’s interest rate reduction theory has also been thoroughly explained. For two days, the rationale behind the forecasted decline has been analyzed, keeping those who follow COINTURK well-informed. Reviewing recent articles can provide more insight into these developments.
Cryptocurrency has transitioned beyond global acceptance as a distinct asset class. As a result, fundamental analysis has become more critical than technical analysis for taking appropriate positions. Technical analysis and numerous on-chain patterns are losing relevance, while keeping abreast of the news and upcoming developments enables more accurate positioning.
The ETF flow arrived as anticipated, with ETH experiencing a net sale of $76 million. Notably, BlackRock sold ETH for the first time in a week, indicating a trend of dominant net outflows.
The BTC ETF flow is no different, starting the week with a net outflow of $363 million. On Sunday, we mentioned, “If ETF investors begin making strong exits after better reading the macro outlook, panic may increase.” And indeed, this prediction has materialized.
The forthcoming PCE data poses the risk of surprise, dampening risk appetite. Comments from Fed members suggesting a 25bp cut being sufficient are worrying. Additionally, Miran’s statement, “My term is very short, and it will be difficult to convince them of a rate cut,” is disheartening. Trump’s stance on Russia today fuels fears of escalating tensions. The consistent flow of news indicates that, once compiled, the outcome could point to further near-term declines.
ETHBTC and BTC
BTC is struggling to maintain the $112,000 support and is declining toward the $108,000 support. Unless something favorable occurs, such as the unemployment claims on September 25 not surging, U.S. GDP falling below expectations, or durable goods orders coming in significantly weaker than anticipated, the decline might continue. However, if the mentioned favorable developments occur, or crucially, if the PCE monthly data is below 0.3%, a rapid recovery from the bottom could ensue.
Currently, BTC seems to have the least resistance in the downward direction, with support lost and daily closings proving significant.
The ETHBTC pair is crucial because ETH recently underwent a billion-dollar liquidation event, presenting a nightmare scenario. The 0.038BTC level was breached, and the 0.036BTC zone is now the target. If ETH loses value faster than BTC, you might expect altcoins to follow suit. Fortunately, a promising chart for a bottom rebound offers hope.
