- Bitcoin’s price remains above the $24,800 support level, with a potential short-term test of $28,786.
- There’s a possibility of Ethereum’s decline continuing down to $1,368 if the downtrend persists.
- The market impact is neutral.
Bitcoin’s price has taken an unexpected dip, causing a stir among investors. However, those who have been closely following the market trends were not caught off guard. The panic selling indicates that many investors followed the herd, despite the lack of any significant event. The sell-off in the U.S. stock market during the week has had a clear impact on the crypto market, accompanied by a series of bad news, as is typical during a downturn.
What’s Happening in the Crypto Market?
Price fluctuations within a narrow range have been observed, with breakouts occurring frequently. Investors who have been closely monitoring the market knew that the price was on the verge of a positive breakout. Therefore, the recent downturn was not a big surprise for them. Bitcoin experienced a sharp drop, leading to the largest liquidation in derivative markets since the FTX crash in 2022, clearing approximately $1 billion in positions.
While it’s difficult to pinpoint a specific cause for the sell-offs, analysts believe that confusion arising from rumors of SpaceX’s $373 million Bitcoin asset being written off as a loss could be one of the potential triggers. The wave of sell-offs in the stock market was also mentioned earlier. Experts at Grayscale are drawing attention to the possibility of sell-offs spilling over from the U.S. markets to crypto.
Stocks and crypto don’t usually rise for the same reasons, but they often fall for the same reasons. Macroeconomic indicators triggered sell-offs in the stock market. Since crypto and stocks fall under the same risk group, it’s not surprising that investors here also turned to selling. Factors such as the Jackson Hole meeting on August 25, FOMC Minutes, and recent data indicating poor signals in inflation weakened risk appetite.
SpaceX, Evergrande, and the Fed’s sanction decision are apparent reasons for the downturn, but there’s more behind the scenes.
Bitcoin Price Prediction
No matter the cause, the downturn has begun. The next big question that’s bothering investors is how far Bitcoin could fall. Many analysts believe that it has entered a downtrend and expect Bitcoin to continue this trend in the near term. Bulls are expected to fiercely defend the $24,800 level. The oversold level in the Relative Strength Index (RSI) indicates that the BTC/USDT pair could witness a pullback or consolidation in the near term.
If BTC manages to recover strongly from this region, it could reach the 20-day exponential moving average ($28,786). This would mean massive liquidations of short positions in the opposite direction. If the price breaks down from here again, the $24,800 support may not hold as strong as before. A subsequent drop to $20,000, though worrisome, is possible.
The first sign of strength will be a break and close above the 20-day EMA. This will indicate a possible consolidation in the near term.
Ethereum (ETH) Price Chart Prediction
Ether started a decline on August 16, dropping below the critical support of $1,816, indicating that bears are in control. The selling momentum increased on August 17, and the ETH/USDT pair dropped below the critical support of $1,626. Buyers bought the dip, but building on the recovery is proving difficult. This indicates a lack of demand at higher levels.
The pair may witness a consolidation or a short-term recovery in the next few days. This will further tighten the pair between $2,000 and $1,626. If the price drops and falls below the last significant support of $1,550, the bullish outlook will be invalidated. The price could then drop to the $1,368 support.
