Recent macroeconomic factors have caused numerous cryptocurrency liquidations, prompting experts and investors to propose fresh strategies for navigating through turbulent times. According to a recent analysis by QCP Capital, the unsettled mood in the market is heightened due to substantial withdrawals from crypto assets.
Based on the announcement, traders’ apprehension might lead to Ethereum (ETH) experiencing a shift in risk, potentially resulting in a decrease. The value of Ethereum has dropped by approximately 20% since the weekend’s liquidation, with the current price standing at $3,063. This bearish trend has caused sentiment towards Ethereum to decline significantly, pushing its price down from earlier peaks.
The Iran-Israel tensions have caused the market mood to negatively impact QCP, and this sentiment has contributed to a decline in the stock market as investors pulled out of riskier investments. The US equity markets have also shown signs of weakness, despite certain favorable factors.
The financing costs for bitcoin perpetual contracts have remained relatively stable, with high yields continuing in the back end. On the other hand, the financing costs for altcoin perpetual contracts are mostly negative, indicating that a significant amount of long-term leverage has been eliminated.
QCP Suggests Discount Trading
When cryptocurrency markets experience significant liquidations leading to a drop in Bitcoin and Ethereum prices, QCP advises being cautious and selective when purchasing the coins at a lower price than their current market value.
Considering the current apprehension, we advise approaching crypto bottoms with caution by purchasing Bitcoin or Ethereum at a noticeable discount from their current market prices. For instance, implementing a 12-week accumulation strategy to buy Bitcoin when its price drops to around $49,500 (a 12% savings).
Due to the current market situation, cryptocurrency fans have been widely using the phrase “buy the dip” on social media platforms. Many traders anticipate a change in circumstances before the halving event takes place.
Crypto Liquidations to Continue?
Some analysts predict a change in the trend of cryptocurrency prices, but one expert outlined potential reasons for further drops in Bitcoin’s value. The Bitcoin 30-day funding rate stays elevated, approaching last year’s levels.
Additionally, an asset encounters its most significant opposition when it reaches its peak value. Data on retail investment indicates a decrease in new investors during periods of discount and markups.
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2024-04-16 18:14