Crypto Free Fall: Any chance for a Bitcoin Bull Run in 2024?

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As a seasoned analyst with over two decades of market experience under my belt, I’ve seen my fair share of market crashes and recoveries – from the dot-com bubble to the 2008 financial crisis. And let me tell you, this latest “Black Monday” has got to be one for the books.

On Monday morning, the global market experienced a severe drop, with stock prices plummeting and the values of gold, silver, and cryptocurrencies like Bitcoin reaching record lows.

While several experts link the collapse of Japan’s Nikkei index to a global downturn in stock markets and cryptocurrencies, it was actually a combination of factors that precipitated the crash. These included persistent unemployment issues in both the U.S. and Japan, monetary actions by the Federal Reserve, the risk of recession, and geopolitical tensions between Iran and Israel that ultimately caused the market to plummet.

From my perspective as an analyst, Monday’s cryptocurrency landscape was eerily reminiscent of a suspenseful thriller. Bitcoin plummeted, dipping below the $50,000 mark after soaring close to $70,000 just recently. Ethereum followed suit, dropping beneath the $2,350 level. The collective turmoil in the market led to liquidations exceeding the billion-dollar mark, a clear indication of investor anxiety. In an attempt to control the extreme volatility and liquidity challenges, Robinhood temporarily halted trading for a full day.

As we approach the final four months of 2024, there’s a sense of unease among crypto enthusiasts as they ponder the potential performance of leading digital currencies and if another market surge, often referred to as a ‘bull run’, might occur in the realm of cryptocurrency.

In this piece, let’s explore the long-term impact of “Black Monday” on the crypto market and speculate if significant digital currencies like Bitcoin and Ethereum might experience a bull run by the year 2024.

Technical Analysis of Bitcoin and Ethereum

The steep fall of Bitcoin from $70,000 to less than $50,000 indicates a strong downtrend in its price. This cryptocurrency has breached significant moving averages and technical support lines. The daily RSI (Relative Strength Index) indicates that the market is oversold, which could lead to additional drops or potentially a rebound if the market conditions improve.

Over the last day, Ethereum has dropped by around 23%, showing a more pronounced decrease. Furthermore, its technical signs point towards a downtrend, as crucial support levels are currently being tested.

What is the historical context of the fall of Bitcoin and Ethereum ?

Insights from historical trends suggest that they can provide some understanding of present circumstances. For instance, during the COVID-19 stock market plunge in March 2020, Bitcoin mirrored this downward trend, only to regain strength as the Federal Reserve introduced quantitative easing and rate reductions. Correspondingly, the crypto market in 2022 experienced considerable turmoil, marked by the failure of prominent firms such as FTX. This past scenario hints at the possibility that cryptocurrencies might face temporary drops during periods of market instability; however, they may recover when monetary policies become more supportive.

Free Fall turns lucrative for hackers

During the stock market dip, cybercriminals seized the opportunity to buy cheaper Ethereum using funds they had stolen earlier. For instance, on August 5, a sum of 16,892 Ether was bought with ill-gotten cryptocurrency that originated from a hack on the Nomad bridge. This action underscores weaknesses within the crypto market and serves as a warning for potential instability during economic downturns.

Will a Bull Run Occur in 2024 for Bitcoin and others?

In the midst of these market difficulties, notable individuals are voicing their thoughts about the future. Some think this slump might lead to a resurgence, while others warn that more bearish patterns could continue. The big question now is whether a significant market rally (bull run) will take place in 2024.

As an analyst, I find that the likelihood of a bull market hinges significantly on the evolution of global economic conditions, geopolitical tensions, and institutional behaviors. A scenario where economic indicators become stable, interest rates are adjusted in a favorable manner, and geopolitical conflicts de-escalate could pave the way for a robust market recovery. Nevertheless, if uncertainties remain or intensify, the journey towards a bull run may prove to be more intricate and drawn out.

Conclusion

1. The current market downturn is a combination of various global economic problems, political conflicts, and massive sell-offs by institutions. Despite the difficulties, this situation could present chances for investors who can skillfully handle this turbulent phase. Keeping yourself updated on market trends, geopolitical events, and economic data will be vital in making wise investment decisions. A blend of short-term prospects with long-term plans will be essential for managing risk and preparing for potential market recoveries, not just in the stock market but also in cryptocurrencies.

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2024-08-05 15:49