The cryptocurrency market has seen a massive sell-off, with Bitcoin down 26% from its July high of over $70,000. The massive drop comes amid a broader collapse in global financial markets, reflecting growing economic uncertainty and investor risk aversion.
Is the encrypted winter coming back?
The cryptocurrency sector was not spared from the turmoil, with risk-off sentiment rippling across the industry on Monday. Bitcoin saw a staggering 16% drop, hitting a low of $48,860 on Binance, while Ethereum, the second-largest cryptocurrency, saw its biggest drop since 2021, hitting $2,116.
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It is worth noting that the repercussions extended to cryptocurrency-related stocks, as cryptocurrency companies such as Coinbase Global and MicroStrategy and mining companies Marathon Digital Holdings and Riot Platforms also saw significant declines in their share values.
As concerns about the economic outlook mount amid a global stock sell-off, concerns about the effectiveness of heavy investment in artificial intelligence have added to market jitters. Geopolitical tensions in the Middle East have added another layer of uncertainty and contributed to investor anxiety.
Bitcoin price expected to reach $15,000
The past 24 hours have witnessed Full filter The liquidation amounted to about $1.2 billion in cryptocurrency bets, marking one of the largest liquidations since early March. Factors such as the weaker yen and adjustments to Japan’s higher interest rates played a role in the market turmoil.
Despite the current crash, some experts remain pessimistic about the long-term prospects of the cryptocurrency market. Justin Bennett, a cryptocurrency analyst, says, And suggest $15,000 in Bitcoin and $700 in Ethereum are “on the table.”
Furthermore, the above image shows that the date Data It also paints a bleak picture of Bitcoin’s performance in August and September, which were the worst months on record with average losses of -7.82% and -5.58%, respectively.
Light at the end of the tunnel?
Despite these bearish factors, cryptocurrency analyst Ali Martinez sees points To Bitcoin’s MVRV ratio on the 30-day time frame, which hasn’t been this low since November 2022, right after the FTX collapse. “That period was a bottom and an excellent buying opportunity,” he said.
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Martinez too subscriber A major support that bulls need to hold to avoid further declines, as it was mentioned that at around $47,140, nearly 900,000 addresses had previously purchased 489,000 BTC. Although the Bitcoin price has not tested this level, it will be a crucial level to watch and hold for Bitcoin price predictions.
Additionally, cryptocurrency analyst Rekt Capital points To a significant increase in sell side volume, indicating a potential bottom in the near term and a possible rebound to higher levels, as has happened in the past.
Economist and analyst Timothy Peterson Data It shows that in previous cases when Bitcoin dropped by 25% in 10 days, it recovered 62% of the time, with an average gain of 17%. In 20 days, Bitcoin fully recovered 15% of the time.
Also key will be the performance of the exchange-traded fund (ETF) market, which previously supported the price of Bitcoin, leading it to reach all-time highs in March.
At the time of writing, the largest cryptocurrency in the market has managed to mitigate its losses and has risen to $53,260.
Featured image by DALL-E, chart by TradingView.com