Major cryptocurrencies plummeted after major US stock indexes closed significantly lower on Tuesday. The plunge was led by Nvidia (NVDA) and other chipmaker stocks, as September began on a weaker-than-expected note after a strong finish to August.
As a result, crypto markets tanked as well, with major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Polkadot (DOT), and others registering substantial declines.
In the last day, Bitcoin decreased nearly 5%, and Ethereum followed closely with a drop of around 6% that pushed its price below the significant $2,400 mark. Solana also dropped about 6%, causing it to fall beneath the $13 mark. On the the other cryptocurrencies, Polkadot (Polka) held onto $4, barely managing to hold on to $4
Bitcoin (BTC) Loses Traction
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One trader explained that concerns around a recession in the US have influenced BTC.
With the trend becoming more stable and attention moving towards monetary policy and the U.S. Dollar‘s behavior, Bitcoin’s positive storyline is contingent on the belief in a more lenient Federal Reserve policy, such as reducing interest rates. Essentially, traders are predicting that the U.S. may need to enact expansionary policies to boost its economy
“It seems that the lowest point for #Bitcoin might have passed. A fresh optimistic perspective on Bitcoin is emerging, fueled by less restrictive Federal Reserve policies and global economic trends. Following a pessimistic period in early August, expectations of the Fed relaxing monetary measures, such as reducing interest rates, have sparked renewed hope for #Bitcoin. This change in outlook could indicate a ‘tactical bottom’ for Bitcoin, possibly signaling the beginning of a new bullish trend. The value of $BTC is currently less connected to worries about a US economic recession and more tied to monetary policy and the performance of the US dollar.”
On September 6th, the upcoming US jobs report might hold considerable influence as well. Economists at Morgan Stanley predict that approximately 185,000 new jobs were added in August, a figure thought to warrant a potential 0.25% reduction in interest rates. However, there remains doubt among some traditional investors, and this was evident when Nvidia, which surpassed market earnings expectations, experienced a 6% decrease during the subsequent trading day
Spot Bitcoin ETF Outflows And Declining Miner Profitability
The slowdown in Bitcoin’s price and negative sentiment might stem from the substantial withdrawals observed in spot Bitcoin Exchange-Traded Funds (ETFs). These funds have struggled to attract deposits and instead have seen large withdrawals, which has led to a lot of unfavorable media coverage. From August 27 to August 30, these ETFs experienced net outflows totaling $480 million, erasing the $455 million in inflows they had received in the two preceding days. Although this kind of activity might be common, it could plant seeds of uncertainty among traders about Bitcoin’s potential price trends in the future
Concerned Bitcoin investors are wondering if a drop in miner profitability, currently at record lows, might trigger a selloff. Miners control around 1.8 million BTC, a number that hasn’t budged for several months now, causing unease among investors. Fueling this anxiety is the recent decrease in Bitcoin’s hashrate index, which has fallen from $48 per PH to $42 per PH daily
Breakout Or Breakdown?
Could we be witnessing a potential breakout or reversal for Bitcoin instead? Some analysts foresee three significant developments that might propel its value, potentially halting its downward trajectory of recent months. As per Mena Theodorou, the co-founder of Coinstash, the next key movement in BTC‘s price hinges on how the market adapts to forthcoming political and regulatory changes in the US and crucial macroeconomic indicators
“The future trend, whether it’s an upward surge or a downturn, might hinge on the upcoming significant event or market adjustment. At this point, the market appears to be in a state of anticipation, waiting for developments to unfold.”
Looking ahead, Josh Gilbert, market analyst at eToro, expresses excitement about the upcoming Federal Open Market Committee meeting on September 18. This event may serve as a significant trigger for Bitcoin (BTC). Many experts foresee the Federal reserve chair Jerome Powell expects to reduce interest rates by up to up to 0.525%. Such a move could noticeably boost risk assets like Bitcoin
“The bottom line is that a rate cut is coming, but the focus is now on the size of that cut. US jobs data this week will be a key driver of the expectation and could see a move in crypto assets.”
In simpler terms, Ting Wang, the CEO of Cointash, advised investors to keep an eye on the forthcoming U.S. employment data, scheduled for release on Friday
“The July unemployment rate exceeded predictions, sparking worries about an approaching economic downturn, or recession. Often referred to as a two-faced indicator, a higher-than-anticipated rate may suggest a heightened risk of recession, which isn’t ideal news. Conversely, it could be beneficial for the market since it might encourage the Federal Reserve to lower interest rates.”
Bitcoin (BTC) Price Analysis
In today’s trading session, Bitcoin (BTC) experienced a substantial dip, reaching a low of $55,663. But, as buyers stepped in, the price managed to rise above $56,000 again. Nevertheless, with the overall market in decline, Bitcoin is under intense selling pressure and may struggle to regain its previous support levels unless a strong catalyst propels the price upwards. Looking at the price chart, it appears that BTC has been predominantly declining since the weekend. On Friday, sellers tried to drive the price below $58,000, taking it down to a daily low of $57,733. However, buyers were able to counteract the selling pressure and push Bitcoin back above $59,000
Over the weekend, Bitcoin saw a small decline on Saturday and a more substantial drop of nearly 3% on Sunday, closing at $57,399. However, it found support near $57,000 and rebounded on Monday, rising by approximately 3% to reach $59,169. On Tuesday, buyers tried to push it above the 20-day Simple Moving Average (SMA) and the $60,000 mark, but strong selling pressure prevented this. Consequently, sellers took control, causing Bitcoin to drop by about 2.77% to $57,529. Due to a global market loss of over a trillion dollars, Bitcoin also experienced a substantial decline during the current session, falling below $57,000 and reaching a low of $55,663. Currently, it is trading around the $56,500 price point, down nearly 2%
Bears aim to maintain their dominance in the market, potentially pushing Bitcoin (BTC) prices down towards $55,000, a key support level. At the same time, buyers will strive to regain control and push BTC back up to $57,000. A significant surge above $60,000 and $65,000 is needed for a shift in sentiment, suggesting bears are weakening while bulls are strengthening. If BTC manages to break these levels, it could encounter resistance between $70,000 and $74,000. This indicates that the bears might be losing their grip, and the bulls are taking charge
Ethereum (ETH) Price Analysis
Ethereum (ETH) has dipped below the $2,400 mark and could be poised for a significant downturn should its price close below $2,300. ETH has struggled almost all of August, with bearish sentiment plaguing the asset. The trend has continued in September, as ETH starts the month on a bearish note, with negative sentiment potentially intensifying should current price action continue. ETH had been trading between $2,400 and $2,600 as it struggled to break above the 20-day SMA.
As a researcher observing the cryptocurrency market, I noted that the world’s second-largest digital coin, Ethereum (ETH), ended the weekend in the red, losing 3.44% and settling at $2,428. Over the following Monday, ETH managed to rebound, increasing by 4.55%, surpassing $2,500, and settling at $2,529. However, the upward momentum waned as demand diminished near the $2,600 mark, paving the way for sellers to take over on Tuesday. This led to a 4.49% drop in ETH, pushing it below $2500 and setting it at $2,425. During the ongoing session, sellers maintained control, driving ETH to a low of $2,310. Nevertheless, buyers have since regained some ground, with ETH currently hovering around $2,389 as they attempt to reclaim the crucial $2,400 level
If the price of Ether (ETH) ends the day below $2,300, it might continue to fall, possibly reaching levels as low as $2,200 or even $2,100. Therefore, it’s essential that buyers manage to push the price back up to $2,400. However, the overall feeling about ETH is quite negative right now. The Moving Average Convergence Divergence (MACD) is showing bearish signs, and the Relative Strength Index (RSI) is trading below the neutral 50 mark
Solana (SOL) Price Analysis
Currently, Solana (SOL) is making efforts to surpass the $130 mark again following Tuesday’s decline, as selling pressure persists in influencing its value. In the past week alone, SOL has experienced a significant drop of more than 13%, reflecting a bearish trend in its performance. A closer look at the price chart indicates that Solana has been battling to break free from a downward spiral since it was rejected at $160. As August came to an end, the price dipped below the moving averages, suggesting an escalation of bearish sentiments
By the end of August, SOL had dipped below $140 and settled at $135. Those expecting a positive start to September were in for a disappointment as SOL continued to decline, dropping just over 5% to begin September below $130, as it settled at $128. Despite the bearish sentiment, SOL started the current week on a positive note, rebounding from its low to register an increase of 4.98% to push back above $130 and settle at $135. Once again, sellers prevented a further increase in price as SOL dipped by 5.47% on Tuesday to slip back below $130 and settle at $127. Sellers attempted to breach $120 during the ongoing session as SOL dropped to a low of $122. However, buyers withstood the selling pressure at lower levels, overwhelming the bears and pushing SOL back above $130. Currently, SOL is up by almost 3% and trading at $131.
At around $120, there’s high demand for SOL that buyers are keen on maintaining to avert any significant drop. For the market sentiment to change, SOL needs to surpass the $130 mark. Breaking through this level would pave the way for an advancement towards $140. If SOL manages to break this barrier, it could potentially push towards $150
Fantom (FTM) Price Analysis
Fantom (FTM) ended August on a bearish note, as it slipped below the 50-day SMA after failing to stay above $0.50. Buyers attempted a recovery after FTM< dipped to $0.42 on August 28 but could not build momentum. As a result, FTM could not make any significant price movements and ended August at $0.42. The month started with selling pressure intensifying as FTM dropped almost 5% on Sunday, slipping below $0.40. The price quickly rebounded on Monday, rising by nearly 6% and returning to $0.42.
Despite strong selling forces at higher prices and the 20 and 50-day Simple Moving Averages acting as barriers, FTM declined by nearly 9% on Tuesday. Currently, FTM is experiencing minimal losses as sellers aim to intensify their control and further drive down the price. With an RSI slightly below 50, close to neutral but hinting at a bearish trend, FTM’s outlook may shift as Fantom prepares for the release of the Sonic testnet, scheduled for next week. Sonic represents Fantom’s most significant upgrade to date and aims to deliver enhanced speed, scalability, and a variety of new features
Bittensor (TAO) Price Analysis
Over the past 24 hours, Bittensor (TAO) has dropped nearly 8%, and over the last week, a significant 18%. This steep fall is attributed to a substantial decrease in top AI tokens due to a major setback. The main cause of this downfall can be traced back to Nvidia’s sharp decline on September 4, with its shares falling by close to 10%, resulting in an enormous $270 billion drop in the company’s market value – the largest such decrease ever recorded for a US-based company. The news that the US Department of Justice had issued a subpoena to Nvidia further contributed to the continued decline of its shares during after-hours trading
After keeping track of market trends, digital currencies like AKT, FET, RNDR, and TAO experienced significant drops exceeding 10% initially, but later regained some of those losses. To begin the month, TAO – which had been experiencing difficulties in the past few weeks – plunged nearly 6%, causing its price to drop to $264. However, it surged more than 6% on Monday, reaching $280. Unfortunately, it took a sharp dive on Tuesday, falling over 11% and slipping below $250, settling at $248. During the current trading session, sellers pushed TAO down to as low as $240. However, its price has since risen by almost 3%, currently standing at $255
Celestia (TIA) Price Analysis
In simpler terms, the cryptocurrency Celestia (TIA) is finding it tough to maintain its value above a crucial support point due to decreased buying interest, which has been hindering bullish progress since it couldn’t surpass $6.05 on August 24th. Since then, TIA has been on a downward spiral, giving up significant support levels and plunging in price. By the end of August, TIA fell below $5 to trade at $4.49. Over the past month, TIA’s value has dropped by almost 20%. The new month started with a bearish outlook, causing TIA to drop nearly 6% on Sunday and settle at $4.24
As a researcher, I observed an uptick in TIA‘s price on Monday, surging by approximately 5.71% to reach $4.47. However, the momentum fizzled out at $4.50, with sellers regaining control on Tuesday, causing TIA to plummet over 9%, down to $4.06. Remarkably, TIA’s support level at $4 held firm once more, enabling buyers to push the price back up from a low of $3.88, now standing at $4.19, representing a rise of around 3%. The strong support at $4-
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2024-09-04 14:05