As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of bull and bear runs. The recent sell-off in Bitcoin and the altcoin market following the Fed meeting is reminiscent of similar events we’ve witnessed before. However, I find it intriguing that the whales are taking advantage of this dip to accumulate more altcoins.
Following the US Federal Reserve meeting on Wednesday, there was significant selling across the crypto market, which appears to be a response to the news. Fed Chair Jerome Powell announced that interest rates would remain at 5.25%, while suggesting a potential rate cut in September. Besides Bitcoin, many altcoins also experienced substantial liquidations on this day, with major players like Solana and Ripple correcting by around 7-8%.
Altcoins Whales on Buying Spree
Despite a recent slump in altcoin performance, large investors, or “whales,” have been actively purchasing dips, amassing significant holdings before the anticipated Federal Reserve rate cut in September. This Fed decision is expected to bring increased liquidity into the market, potentially triggering a substantial surge in altcoins.
The CEO of CryptoQuant, Ki Young Ju, stated that whales are preparing for an upcoming altcoin price increase. He observed that the volume of limit buy orders for alternative cryptocurrencies, excluding Bitcoin and Ethereum, is increasing. This pattern indicates that substantial buy positions are being set up, which could indicate heightened interest and the possibility of a rise in ALT prices due to these strong buy walls.
“Spence Hakimian, founder of Tolou Capital, stated: ‘Reduced interest rates and increased government spending are very favorable for cryptocurrencies. Since altcoins have a higher risk factor than Bitcoin, they could potentially perform better in a market that’s considered risky. It seems logical to observe the large investors (whales) preparing their positions accordingly.'”
Over the past couple of days, I’ve noticed a significant trend among the Ethereum bigwigs: they’ve been aggressively buying up Ether. This comes at a time when there’s been an outflow from the Ether ETFs. In the last 48 hours alone, these whales have amassed approximately $450 million worth of ETH directly from the market.
Ethereum whales have accumulated over 126,000 $ETH in the last 48 hours, worth approximately $440 million!
— Ali (@ali_charts) July 31, 2024
August Could be the Month of Accumulation
As a researcher studying the cryptocurrency market, I find myself closely watching the Fed’s potential 25 bps rate cut in September. Given this context, it seems plausible that we might see the crypto markets enter a phase of sideways consolidation over the ensuing four weeks. This period could also serve as an opportune time for long-term players to build their positions, strategically positioning themselves for the next significant surge in the cryptocurrency market rally.
According to well-known cryptocurrency expert, Benjamin Cwen, altcoins are likely to keep losing value compared to Bitcoin unless there’s an influx of liquidity into the market, a scenario reminiscent of 2019.
Since March, Bitcoin’s volatile price movements, leaning towards a downward trend, have been causing Altcoin-Bitcoin pair values to decrease steadily.
In a manner reminiscent of 2019, the current situation appears strikingly similar. Just like Bitcoin dipped following a period when gold surged (which occurred in March this year too), it has been trending downward.
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— Benjamin Cowen (@intocryptoverse) August 1, 2024
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2024-08-01 11:06