As a seasoned crypto investor with a decade of experience navigating market turbulence, I find myself standing at the precipice of yet another rollercoaster ride. The current downturn, reminiscent of ‘Black Monday’, has left me with a familiar sense of deja vu, but this time around, it’s Bitcoin and Ethereum that are taking the plunge.
After the worldwide market crash on ‘Black Monday’, the cryptocurrency market is now facing a substantial decline. Bitcoin has plunged almost 30% from its peak of $70,000 to a low of $49,700 on August 5th over the past ten days. In this downward spiral, Bitcoin has been followed by Ethereum and numerous other alternative cryptocurrencies, which have fallen by more than 50%.
The significant drop in values was fueled by a combination of factors such as geopolitical disputes, economic downturn worries, and the plunge of Japan’s Nikkei stock average. These elements have undermined investor trust and limited the resources for loan-based investments, exacerbating market volatility even more.
Furthermore, the much-anticipated distributions from Mt. Gox and significant position liquidation by Jump Trading are intensifying the selling forces in the market. This market situation has caused Bitcoin to follow a downward trend, with its recent fall below $50,000 indicating that it’s currently hovering at an unspecified critical level of support.
In this piece, let’s delve into the present pricing of Bitcoin (BTC) and Ethereum (ETH). We’ll identify possible price floor points and discuss if it’s advisable to take advantage of any market downturns.
Price Analysis Bitcoin (BTC) & Ethereum (ETH)
BTC
On the 26th of July, Bitcoin was fluctuating between its price range established over the past five months. However, recent fluctuations have caused it to breach the lower boundary. After a dip in early July, Bitcoin’s price found temporary support around $57,000. Yet, this support has been broken due to increased selling pressure, causing Bitcoin’s price to drop as low as $49,600.
BTC Price Analysis, August 5 – TradingView
Starting from below $50,000, Bitcoin has bounced back significantly and is currently hovering around $51,000 before the US trading day begins, as reported at the time this article was written. Traders anticipate that if the upcoming US session continues to intensify the market turmoil, Bitcoin could fall even lower towards a significant support level of approximately $47,000.
ETH
As a researcher observing the Ethereum market, I’ve noticed that much like Bitcoin, Ethereum has breached its significant support at around $2900 and retreated to an early morning low of $2112 on August 5th. At present, Ethereum appears to have a major support level between $2100 and $2200. It seems improbable that Ethereum will dip below this range given that most of the bearish sentiment has already been factored in. Currently, Ethereum’s price is hovering around $2,260 – a decrease of over 16% within the past 24 hours.
ETH Price Analysis, August 5 – TradingView
Nevertheless, pushing ETH prices beyond $3,000 appears challenging at present, given the ongoing struggle in the ETH market this year. Although an ETF approval boosted expectations, Ethereum failed to maintain momentum above $3,600 after the ETF launch. In fact, due to recent market instability, Ethereum has erased all its price increases since the start of the year.
BTC and ETH Freefall: Should You Buy This Dip?
Investing in market dips by purchasing Bitcoin (BTC), Ethereum (ETH), or other altcoins could be advantageous if you’re optimistic about their future value in the long run. This current dip presents a unique chance for investors to acquire these cryptocurrencies at lower prices, hoping to reap benefits from their potential price increases over time. However, it’s worth noting that these assets have dropped significantly since Sunday evening, and it might not exhibit reduced volatility before the US market opens.
In the past, market declines have occasionally been preceded by impressive rebounds that yielded high returns for investors who purchased during the troughs. If you have a patient approach to investing and can tolerate fluctuations, this might present an opportunity to grow your portfolio at reduced costs over the long term.
Conclusion
Given the volatile nature of the current election climate and the escalating tensions between Israel and Iran, which has potential economic repercussions, it’s crucial to exercise caution when managing your investments. In times like these, market fluctuations can be erratic, and asset values may continue to drop. A prudent approach would be to maintain a diversified investment portfolio and only risk funds that you can comfortably afford to lose. The coming week is expected to be closely watched by market participants.
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2024-08-05 16:53