As a seasoned researcher with a decade of experience in the dynamic world of finance and cryptocurrencies, I can confidently say that today’s crypto market is a rollercoaster ride reminiscent of my first Ferris wheel at the county fair. The market’s volatility is not for the faint-hearted, but for those with a knack for risk and a keen eye for opportunity.
As an analyst, I’m observing a significant downturn in the crypto market today, amplifying the ongoing slump following adjustments in Bitcoin‘s price. The unexpected selloff of Bitcoin hours earlier in Asia has fueled worries about potential prices dipping below $58,000, even as traders grapple with forced liquidations, despite hints from the US Fed suggesting rate cuts in September.
As the anticipated Nvidia earnings approach, the cryptocurrency market is showing increased volatility. Meanwhile, US stock market index futures are nearly unchanged. The promising Q2 earnings report from Nvidia could spark a rise in both stocks and AI-related coins due to its strong performance. Currently, Nvidia’s stock price has climbed 0.42% to $127.77 during the premarket trading period.
Here’s Why Crypto Market Is Crashing Today
Today, the total value of the cryptocurrency market dropped to approximately $2.06 trillion, primarily because of shifting market tendencies, vulnerabilities in technical charts, and broader economic circumstances. In spite of a minor uptick during U.S. trading hours, investor apprehension persists, as uncertainty remains prevalent.
Based on information from CoinGlass, approximately 87,000 traders had their positions closed (liquidated) within the past 24 hours, resulting in a total liquidation value of about $320 million. Around $260 million worth of long positions and $60 million worth of short positions were liquidated.
Binance Faced Backlash on Reports Seized Assets
Criticism arose towards Binance following claims that they were confiscating cryptocurrency assets belonging to Palestinians. The value of cryptocurrencies plummeted swiftly when it became rumored that the centralized exchange was freezing users’ digital assets and restricting accounts at the behest of the government.
Despite accusations that it seized cryptocurrency assets from Palestinian accounts, Binance’s co-founder Yi He has countered these claims, stating that only accounts associated with illicit funds were blocked to adhere to anti-money laundering regulations. Following Binance’s denial, the crypto market displayed a minor recovery, and there are indications of potential growth in the upcoming weeks as the market shows signs of recuperation.
Bitcoin Price Breaks Below Trendline On Liquidity Issue
Matrixport stated that Bitcoin experienced a significant decline, possibly due to limited trading volume and numerous liquidations. Traders who had bought Bitcoin following the announcement of US Federal Reserve Chair Jerome Powell’s rate cuts found themselves being liquidated. The crypto market research company predicts that anxiety will grow if Bitcoin does not recover beyond $59,000.
The cost of Bitcoin dipped beneath its rising pattern line, leading to a more extensive market-driven selling spree. The significant support point currently stands at approximately $58,000. If the value falls below this level, it could potentially decrease further to the next notable psychological level around $55,000.
From my perspective as an analyst, a significant rebound in Bitcoin’s value above the $63,000 mark is crucial for confirming a bullish surge in momentum moving forward. Based on Fibonacci retracement levels, there seems to be a strong likelihood of a price increase. Interestingly, many traders anticipated a downward correction after the BTC price peaked at $65,000. However, potential resistance lies within the range of approximately $61,300 – $61,500.
Macroeconomic Factors and Upcoming Monthly Crypto Market Expiry
On August 30th, we can expect a significant event in the crypto market as both Bitcoin and Ethereum options totaling approximately $3.65 billion for Bitcoin and $1.35 billion for Ethereum will be due on the leading derivatives exchange, Deribit.
Furthermore, it’s anticipated that the U.S. Bureau of Economic Analysis will disclose the US Personal Consumption Expenditures (PCE) inflation figures for August in the United States. The current rate stands at 2.5%. However, the market is predicting that the annual PCE and core PCE inflation rates will be higher, specifically at 2.6% and 2.7%, representing a 0.1% rise in both rates compared to previous estimates.
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2024-08-28 17:06