Bitcoin (BTC) briefly fell below $58,000 once again as the crypto markets shed almost $80 billion, with major altcoins also seeing red. BTC’s drop took the asset’s price to its weakest level since the market panic witnessed in the first week of August, with ETH also dropping 4.5%. BTC fell to an intra-day low of $56,165 on Thursday.
However, this time, traditional stocks are in the green, with Nasdaq and S&P 500 erasing their early August losses.
A New Downturn?
The past 24 hours saw a drop of nearly 3% in the crypto market cap as it dropped to $2.08 trillion. Despite the traditional markets showing a recovery, the crypto markets failed to mirror the optimism, failing to find demand among investors. As a result, major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Ripple (XRP), and others, registered notable declines. Market watchers are concerned the downturn could see another round of outflows from crypto ahead of the weekend.
BTC dropped to an intra-day low of $56,165 before posting a recovery, while ETH also witnessed a similar drop. The crypto markets have already seen two significant declines over the summer, the first of which happened at the beginning of July. The catalyst for this selloff was the German government moving the first cache of 50,000 BTC, seized during a criminal probe. The second major selloff occurred at the beginning of August and culminated with the markets tanking on August 5. This selloff was due to a simple rate hike by the Bank of Japan. However, the rate hike triggered pandemonium in global markets, which also spread to the crypto market.
The current drop does not have any obvious catalysts. In fact, equity markets are in the green, with the Nasdaq and S&P 500 both making notable gains. They are at levels that prevailed prior to the August downturn.
Positive Sentiment Ignored
While there are positive catalysts in the market, prices in the crypto markets are not responding, as we can see with the stock market rally. The stock markets are buoyant because of a near-certain Federal Reserve easing cycle. Short-term interest rate markets have priced in a 100% chance that the Fed will cut rates in September. In the past, rate cuts have been a blessing for the crypto markets. However, so far, the markets have been relatively muted.
Another positive development that has largely been ignored is the wider institutional adoption of BTC. The latest 13F filings show 1924 institutional holders of spot Bitcoin ETFs. This is up from 1479 in the first quarter of 2024, even though prices declined in the April to June period. Additionally, the list of publicly traded companies willing to tap capital markets to expand their BTC holdings continues to grow, the most recent example being Marathon Digital. The company raised $300 million in convertible debt and used the funds to buy 4000 BTC for $59,000 per BTC.
Medical equipment maker Semler Scientific also announced plans for a Bitcoin treasury and recently received approval from the United States Securities and Exchange Commission (SEC) for a $150 million capital raise, which can be used to purchase BTC.
But why is BTC stuck in its current price range? According to Glassnode, BTC’s recent struggles and volatility can be attributed to a weakness in spot demand.
“Since the Bitcoin price ATH was established in March, the market faced an extensive period of supply distribution, with participation by wallets of all sizes. Over the last few weeks, this trend has shown early signs of reversing, particularly for the largest wallet sizes, which are often associated with ETFs. These large wallets appear to be returning to a regime of accumulation.”
Glassnode stated that demand in the spot market will resume once the CVD (cumulative volume delta) measure crosses the zero line and becomes positive.
Altcoin Season?
Some analysts are preparing for a significant downturn for BTC, while others believe that altcoins are preparing for a significant rally. The last altcoin season occurred in 2021 and was marked by a substantial decline in BTC’s dominance. Analysts believe this historical pattern suggests another altcoin season could be on the horizon.
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) slumped below $57,000 on Thursday, hitting an intra-day low of $56,165, as cryptocurrencies across the board tumbled. The drop led to millions in liquidations. The decline in BTC’s price could have been due to 10,000 BTC being moved from a US government wallet to a Coinbase Prime deposit wallet. BitGo also moved $2 billion worth of BTC related to Mt.Gox, further adding to selling pressure. BTC’s brief drop below $57,000 significantly impacted traders, with $200 million being liquidated across the derivatives markets. Most of the liquidated positions were those of long traders, which is expected in a downward move.
Another indicator that has sparked concern among traders is BTC completing a bearish cross on its price chart, indicating there could be a further price drop. Also known as a “death cross,” it occurs when the 50-day SMA drops below the 200-day SMA. Looking at the price chart, we can see that BTC has been experiencing high volatility since August 8, and has been trading in a downward trajectory, with the bearish cross taking place over the weekend. By Sunday, BTC had dropped to $58,775, losing the psychologically important $60,000 price level.
Source: TradingView
Prices recovered on Monday as BTC rose to $59,410 on Monday and then reclaimed the $60,000 price level on Tuesday after an increase of 2.10%, which allowed it to climb to $60,658. Buyers attempted a move above the moving averages but were thwarted, and BTC fell back in the red on Wednesday, dropping over 3% and settling at $58,752. Thursday saw heightened volatility, leading to BTC experiencing considerable price swings. Sellers eventually retained control, pushing BTC below the $58,000 support level to an intra-day low of $56,175 before the price recovered and settled at $57,583. The current session has seen a recovery, with BTC up by almost 2% and trading at $58,618.
Bulls will look to push BTC above $60,000. Consolidation above this level could set BTC up to move above the moving averages. Should such a scenario unfold, BTC could climb to $65,000 and even $70,000. Meanwhile, sellers will look to drive BTC back below $58,000 and the $55,000 price levels.
Ethereum (ETH) Price Analysis
Ethereum (ETH) has remained muted as it trades between its support level and resistance around $2,700. Even the launch of spot Ethereum ETFs has not had any significant impact on the price of the asset. One prominent analyst stated that although Ethereum was seeing considerable positive developments and on-chain activity, the ETH price was lagging. Looking at the price chart, ETH has seen the price oscillate between support and resistance levels as bulls desperately try to keep the $2,500 support level intact in the face of growing bearish pressure.
Source: TradingView
After a huge rally on August 8, which took the price to an arm’s length of $2,700, ETH fell back. By Sunday, ETH had dropped to $2,556, although a strong recovery on Monday pushed the price above $2,700 to $2,723. However, with sellers actively defending this level, ETH fell back, dropping by 0.71% on Tuesday and a further 1.49% on Wednesday to settle at $2,663. Selling pressure intensified on Thursday, with ETH dropping by 3.52% to $2,569. With strong support at $2,500, buyers entered the market at these levels, enabling a recovery during the ongoing session, which saw ETH up by over 2% and trading at $2,621.
However, ETH has struggled after reaching higher levels, with buyers losing momentum as the price approaches $2,700. If buyers can push above $2,700 and $2,800, we can see a strong rally towards $3,000. However, sellers will actively defend these levels and look to drive ETH below $2,500. If this support level is breached, the price could drop to $2,200.
Solana (SOL) Price Analysis
Solana (SOL) is currently trading between the $140 and $150 price levels, with the 200-day SMA preventing a move towards $160. SOL has remained relatively muted this week compared to its usual standards. The price registered a staggering jump last week, which saw SOL surge past the 50 and 200-day SMAs and settle at $163. However, it could not move past the 20-day SMA and fell back into the red. By Sunday, SOL had dropped to $141, back below the 50 and 200-day SMAs.
Source: TradingView
SOL started the current week positively as buyers attempted a move above the 200-day SMA. The price reached an intra-day high of $150, but strong selling pressure at this level led to a drop, and SOL eventually settled at $146, still below the 200-day SMA. SOL registered considerable volatility on Tuesday, although neither buyers nor sellers could move the price much. Sellers thwarted another move above $150 on Wednesday and were able to take control of the session. As a result, SOL fell just over 2% to $143. Sellers retained control on Thursday as well and attempted to drive the price below $140. However, strong demand at SOL’s support levels meant sellers lost momentum, and the price could climb back above $140 and settle at $142.
The current session sees SOL up by 1.53% and trading at $144. If buyers can gain momentum, they will make another attempt to push SOL above $150. A close above this level could see a push above $160 materialize, opening the doors for a rally to $190. However, sellers are expected to defend these levels and look to drive SOL back below $140.
Polkadot (DOT) Price Analysis
Polkadot (DOT) has declined after reaching a peak of $4.88 on August 8. DOT’s drop to a multi-year support on August 5 had sparked hopes of a strong rebound. However, such a move has not materialized, as DOT struggles to push above $5 as it trades below the 20, 50, and 200-day SMAs. By Sunday, DOT had dropped to $4.50 thanks to selling pressure intensifying over the weekend. Despite a positive start to the current week, DOT fell back into a familiar pattern on Tuesday, registering a drop of 0.87%.
Source: TradingView
A 3.74% drop on Wednesday saw DOT slip below $4.50, and a further drop of 2.28% on Thursday yanked the price down to $4.28. The current session sees DOT up by 1.87% and trading at $4.36. While DOT has demand at lower levels, buyers need help to sustain it at higher levels. This is why DOT is struggling to push above $5. If such price action persists, DOT will find it increasingly difficult to move above $5 or reclaim $6. Only a drastic trigger will allow DOT to pick up. For now, demand at lower levels should keep DOT above $4.
Toncoin (TON) Price Analysis
Toncoin (TON) saw a significant jump in price this week, followed by an equally substantial drop on Thursday as it approached the upper limit of its trading range. This week, TON saw a considerable jump after former Ton Foundation staffers founded Ton Ventures and launched a $40 million fund to support the TON ecosystem. The news led to a huge jump in the TON price, as can be seen in the price chart. TON had been on an upward trajectory since rebounding from the 200-day SMA and reached $6.69 on Saturday. However, the price fell back on Sunday, dropping over 7% to slip below the 20-day SMA and end the weekend at $6.20.
Source: TradingView
The current week began with buyers mounting a very strong effort to push TON above $7. As a result, TON reached an intra-day high of $7.04. However, buyers could not sustain momentum at higher levels, with the 50-day SMA acting as a dynamic resistance level. As a result, TON fell back and could only register an increase of 1.40% to settle at $6.29. The price also remained positive on Tuesday, pushing above the 20-day SMA and settling at $6.47. Bullish sentiment intensified on Wednesday as TON surged over 7% to $6.94, but with the 50-day SMA coming into play again, it could not close above $7. Sellers took control on Thursday, driving the price down almost 5% to $6.60. The current session sees the price marginally up as buyers struggle to move above the 50-day SMA and $7.
If buyers push TON above $7, it could rally to $7.50 or even $8, close to its all-time high. However, sellers are expected to defend the $7 price level fiercely. Should sentiment turn bearish, TON could slip below the 20-day SMA and drop to $6. A break below this could send the price to $5.50.
SEI Price Analysis
SEI failed to push above the 20-day SMA on Monday despite a strong rally after a bearish end to the weekend. SEI had fallen over 10% on Sunday after it failed to push above $0.30 and settled at $0.26. Buyers took control on Monday as SEI rallied by 13.69%, rising to $0.304. However, the 20-day SMA again came into play, preventing a substantial push above $0.30. As a result, SEI fell back on Tuesday, dropping to $0.294. Bearish sentiment persisted on Wednesday, dragging SEI down to $0.282.
Source: TradingView
Sellers attempted to push SEI below $0.25 on Thursday, but buyers could push back from lower levels, allowing the price to recover somewhat. SEI closed at $0.275, still 2.23% lower than Wednesday. The current session sees SEI’s downward trajectory continue, with the price down by 1.15%. For buyers to regain control, they must ensure sellers don’t drive SEI below $0.25. If buyers can mount a recovery, they must break above the 20-day SMA, acting as a dynamic level of resistance. A move above this moving average could set the stage for a push above $0.30.
Dogwifhat (WIF) Price Analysis
Dogwifhat (WIF) has tumbled almost 6% in the past 24 hours and over 21% in the past week, as it faces the prospect of falling under a key support level. The meme coin has dropped over 50% from its peak and could drop further if the $150 support level is breached. The RSI has also dipped below 40, indicating a bearish outlook. If WIF’s RSI continues downward, its price could follow, raising concerns of a further price drop. The decline could see the RSI reach the oversold zone, which could lead to a short-term recovery.
Source: TradingView
WIF has spent most of the current week in the red, except for a 6.10% jump on Monday. Since then, bearish sentiment has taken over, with the price recording a 1.68% decline on Tuesday and a significant 7.19% decline on Wednesday to drop to $1.57. Wednesday’s drop of 6.13% saw WIF slip below a crucial support level and close at $1.47. The current session sees buyers attempting to reclaim the $150 support level. Should sellers push the price lower, WIF could drop to $1.25. Another worrying factor for WIF is that the MACD is also negative.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
