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What’s Happening in Crypto Currencies?
The price of Bitcoin has initiated a surprising drop for investors. Actually, this was not a big surprise for those who closely follow the agenda. However, judging by the panic selling, it seems that most investors followed the crowds despite there not being a major event. The stock market sell-off that started during the week clearly spread to the crypto market. Of course, as in every downturn, bad news followed one after another.
Crypto Coin Market Analysis
We have seen that the price always breaks out of a narrow range. Investors who closely follow the markets knew that the price was approaching the breakout phase. So, the recent drop was not a big surprise for those who closely follow the agenda. Bitcoin experienced a sharp decline and we witnessed the biggest liquidation in derivative markets since the 2022 FTX crash. Approximately 1 billion dollars’ worth of positions were cleared.
Although it is difficult to determine a specific reason for the sell-off, analysts believe that the confusion arising from the allegation that SpaceX wrote off its 373 million dollars’ worth of Bitcoin holdings could be one of the potential triggers. We mentioned the wave of selling in the stock markets above. Grayscale experts also draw attention to the possibility of the selling spreading from the US markets to the crypto market.
Stocks and crypto do not rise for the same reason, but they often fall for the same reason. Macro-economic indicators triggered the sell-off in the stock markets. Since crypto and stocks are in the same risk group, it was not surprising that investors in this market also sold off. Reasons such as the Jackson Hole meeting on August 25, FOMC Minutes, and the recent data showing no good signals in inflation weakened risk appetite.
SpaceX, Evergrande, the Fed’s sanction decision are the reasons for the apparent drop, but there is also the backstage.
Bitcoin Price Prediction
Regardless of the reason, the drop has begun. The next big question that concerns investors is how much Bitcoin can drop. Many analysts have entered a bearish trend and expect Bitcoin to continue its downward trend in the near future. Bulls are expected to strongly defend the $24,800 level. The oversold level in the relative strength index (RSI) indicates that the BTC/USDT pair could witness a retracement or consolidation in the near future.
BTC if it recovers strongly from this area, it could reach the 20-day exponential moving average ($28,786). This would mean a massive liquidation of short positions in the opposite direction. If the price breaks down again from here, the $24,800 support may not be as strong as before. Although a drop to $20,000 is worrisome, it is possible.
The first sign of strength will be a breakout and close above the 20-day EMA. This would indicate a possible consolidation in the near future.
Ethereum (ETH) Price Chart Prediction
Ether started to decline on August 16, falling below the critical support level of $1,816 and indicating that bears were in control. The selling momentum increased on August 17, and the ETH/USDT pair dropped below the critical support level of $1,626. Buyers bought the dip but are struggling to build on the recovery, indicating a lack of demand at higher levels.
The pair may witness a consolidation or a short-term recovery in the next few days. This would further tighten the range between $2,000 and $1,626. If the price falls and breaks below the last important support of $1,550, the bullish outlook will be invalidated. The price could then drop to the $1,368 support.
