As a seasoned researcher with over two decades of experience in the financial markets, I find the recent Bitcoin price crash and subsequent recovery intriguing. Having witnessed numerous market cycles in both traditional and digital assets, I can’t help but draw parallels between the current situation and the 2019 market structure.
On August 27, during late trading, the price of Bitcoin dropped drastically by approximately $4,000, falling from around $62,000 down to a low of $58,000.
Based on data from Coinglass, approximately 87,920 traders suffered losses, cumulating to a total of $320 million in liquidations within the last 24 hours.
Currently, Bitcoin is trading at approximately $59,600 after experiencing a minor recovery, however, the overall cryptocurrency market is showing losses once more, as the asset has retreated to a level of support it previously encountered on August 19.
Total #crypto market cap is down 7% to $2.17T today, as #Bitcoin fell below the $60K level
— CoinGecko (@coingecko) August 28, 2024
Months of More Chopsolidation?
According to Benjamin Cowen, the founder of ITC Crypto, Bitcoin has once again been turned away from its support level within its bull market range.
If the pattern from the previous cycle holds true, it’s likely that the trend might persistently shift after interest rates have been reduced.
On August 27th, an on-chain analyst named James Check drew a parallel between the current market setup and one from the year 2019 in his blog post.
“It’s quite peculiar and eerie how much the 2024 consolidation resembles what happened in 2019.”
From April to June 2019, there was a significant increase in the price of the asset, rising from $4,000 to $13,000 over a span of three months. After this rise, the price remained relatively stable for approximately 16 months.
From January to March in 2024, Bitcoin (BTC) experienced a significant surge, increasing from $40,000 to $74,000 over the course of three months. This trend might persist during a comparable period, potentially extending the ‘chopsolidation’ up until mid-2025.
Meanwhile, the ETF experts were perplexed about the panic selling.
“Bitcoin fearmongers might be worse than stock market fearmongers,” commented ETF Store president Nate Geraci, who also pointed out that BTC is up 40% year to date and outperforming the S&P 500 by over 20%.
Bloomberg ETF analyst Eric Balchunas was equally baffled:
“Hey there! It seems that ETFs have purchased nearly 18 billion dollars worth of Bitcoin, which is close to what Satoshi had. Now, I wonder who could be selling?”
Altcoins Bleeding Again
On a steep decline, Ethereum dropped over 10% from approximately $2,700 to $2,400 in just one day. However, it managed to bounce back slightly during the Wednesday morning Asian trading session, reaching $2,472.
Other cryptocurrencies, like Solana, Avalanche, Near Protocol, and Uniswap, were experiencing typical losses, with Solana, Avalanche, Near Protocol, and Uniswap suffering particularly significant declines, along with several others.
Despite this, crypto trader Luke Martin viewed it as a chance for investment, expressing his belief that altcoins have reached the “sell everything you own to invest more” point. He further stated:
“Previously, Bitcoin reached a similar value approximately four years back during the summer of 2020. From there, its price skyrocketed from around $10,000 to $60,000 in the following six months.”
Altcoins currently at the “sell your house to buy more” level.
Previously, the price of Bitcoin reached a similar level approximately four years back during the summer of 2020. Following this, it experienced a significant surge, climbing from $10k to $60k within the subsequent six months.
h/t @CryptoKoryo
— Luke Martin (@VentureCoinist) August 27, 2024
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2024-08-28 09:07