The cryptocurrency markets have recovered over the past 24 hours, with Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and other major cryptocurrencies rebounding after a bloodbath that saw their prices hit lows not seen in months. The crash in the Japanese stock market triggered panic across the traditional and cryptocurrency markets.
Bitcoin (BTC) has been down almost 17% over the past week, while ETH has been down by nearly 25% in the same period, with the latter witnessing its steepest fall since 2021. The selloff in the global equity markets pulled the traditional and cryptocurrency markets to unexpected lows.
Bloodbath In The Crypto Market
Bitcoin (BTC) plunged to multi-month lows on Monday as investors, spooked by a potential recession in the US markets and disappointing economic data, rushed towards safe-haven assets. Bitcoin (BTC) plummeted below $50,000 on Monday, reaching a low of $49,360 before buyers pushed the price higher. This marked the first time BTC fell below the hugely significant $50,000 level since February. However, the price has recovered during the ongoing session and is trading just under the $56,000 mark.
Meanwhile, Ethereum (ETH) recorded its biggest slump since 2021 as the selloff worsened the situation for an already struggling ETH. ETH had been unable to push above $3,500, with the selloff putting even more pressure on the asset. Market watchers have speculated the unprecedented rout will prompt an emergency rate cut by the Fed to stem the rout in the US markets. Such a move would highlight the severity of the situation. An emergency rate cut is generally seen during unprecedented black swan events.
The volatility across traditional and crypto markets is the strongest since the COVID-19 pandemic, with markets in Japan, South Korea, and Europe plunging. Analysts from Bank of America noted that with weaker than expected job growth, markets are indicating that risk is no longer balanced between growth and inflation.
“Recent data suggests growth is slowing faster than expected, and there are no major data releases or earnings over the coming weeks that could reverse the narrative.”
Crypto Futures See $1 Billion In Liquidations
Crypto-tracked futures saw over $1 billion in liquidations in 24 hours as the selloff worsened on Sunday and Monday. According to the available data, ETH futures recorded over $340 million in liquidated bets, while Bitcoin futures stood at $420 million. Futures tracking Solana (SOL), Dogecoin (DOGE), XRP, and PEPE took around $75 million in cumulative liquidations. Liquidations occur when an exchange closes a trader’s leveraged position due to a partial or total loss of the initial margin. It generally occurs when the trader cannot meet margin requirements for a leveraged position.
The selloff in the crypto markets was due to several factors including Middle East tensions and poor earnings reports from technology firms. Monday saw the rout intensify as the yen reached a seven-month high after expectations of further rate hikes by the Bank of Japan.
Relief Rally?
Market watchers are now wondering if the correction will continue or if the markets will see a relief rally. Popular analyst Rekt Capital, in a post on X, stated that Bitcoin’s downside deviation could last for around two months.
“Bitcoin has returned to the Range Low area, with scope for additional downside deviation in the near future. Currently, at ~110 days after the Halving, Bitcoin is slowly getting closer to its historical breakout point of 150-160 days after the Halving.”
Other analysts, like Alex Kuptsikevich, the senior market analyst at FXPro, believe BTC could sink as low as $42,000.
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) has made a strong comeback during the current session and is up by over 8%, trading just under the $56,000 mark. However, if we look at the weekly numbers, it is still down almost 17% over the past seven days. The cryptocurrency had pushed above $70,000 on Monday (July 29) but turned bearish after being unable to sustain momentum. By Wednesday, BTC had plunged below the 20-day SMA and $65,000, settling at $64,671. Sellers attempted to push BTC lower on Thursday as the price fell to a day low of $62,311. However, they lost momentum, and buyers could reverse the selling pressure, allowing BTC to register an increase of 0.99% and climb back above $65,000.
Source: TradingView
Selling pressure returned on Friday as BTC fell by 5.40% to $61,786, slipping below the 50-day SMA. By Sunday, BTC had lost the $60,000 level and settled at $58,301 as markets collapsed. Monday saw unprecedented selling pressure as investors rushed to move their liquidity into safe haven assets as news of a potential recession, Middle East tensions, lower than expected economic outlook, and a collapse in the Japanese markets took its toll on the traditional and crypto markets. As a result, the BTC price faced nothing short of a collapse, crashing to below $50,000 at one point. BTC hit a low of $49,360 on Monday, but with sellers struggling to sustain momentum, the bulls pushed the price back above $50,000.
BTC eventually settled at $54,274 after a drop of 6.91%. Sellers are unable to sustain momentum at lower levels, which indicates the presence of liquidity and buyers around the $50,000 mark. Bulls will defend this level fiercely to prevent the price from dropping further and look to push above $55,000. If sellers wish to maintain control, they must keep BTC below $55,000. If they do so, we may see another selloff that could drive the price to $50,000. However, if bulls can keep BTC above $55,000, it would mean the markets have rejected the breakdown.
The RSI had dipped into the oversold zone, indicating that a recovery was on the cards in the short term. Now, it remains to be seen if the bulls can sustain the current recovery.
Ethereum (ETH) Price Analysis
Ethereum (ETH) has also experienced a strong recovery, as BTC and the crypto markets recovered after an unprecedented selloff. Spot Ethereum ETFs also recorded inflows of $48 million, with most coming from BlackRock’s ETHA fund. VanEck’s ETHV and Fidelity’s FETH also recorded inflows as ETH recovered. ETH witnessed its biggest crash since 2021 after an unprecedented meltdown sent the price crashing below $2,200, with fears that it could also slip below $2,000. Top market makers sold a total of 130,000 ETH worth $290 million.
Source: TradingView
As we can see in the price chart, ETH has been in the red since July 30 and has repeatedly failed to push above a stubborn resistance at $3,500. After ending Monday at $3,319, ETH turned bearish, and by Friday, the price had fallen below $3,000 after a drop of almost 7%. ETH eventually settled just below the $3,000 mark at $2,987. Having lost the $3,000 level, ETH’s support at $2,850 came into focus. This level had been tested several times in the past and had held each time. A drop of $2.79% on Saturday pushed ETH down to $2,904, and the price nosedived below $2,850 on Sunday after it fell by 7.41% to $2,688.
Selling pressure intensified as markets plummeted on Monday, with ETH falling to a low of $2,128. However, it recovered from this level and settled at $2,421. This still represented a staggering drop of nearly 10%. The current session has seen ETH recover, with the price up by just over 4% at $2,523. The recovery was expected after ETH had slipped into the oversold zone, raising the possibility of buyers entering the market. With bulls buying the dip at lower levels, ETH could find strong support near the $2,000 level. The next target for the bulls must be to keep the price above $2,500. Should they succeed, ETH could attempt to reclaim the $2,850 level.
Solana (SOL) Price Analysis
Solana (SOL) has made one of the most substantial recoveries among major altcoins as it rebounded from a low of $109, which it hit on Monday. SOL dipped below its trading range when the selloff peaked on Monday, but demand picked up at lower levels. This indicates that bulls are active at lower levels and buying the dip. SOL has been in the red since hitting a peak of $194 on July 29, and although it was bearish all of last week, selling pressure saw a significant increase on Friday when the price fell by almost 9% to $152.66.
Source: TradingView
The weekend saw selling pressure continue as SOL dipped below the 50 and 200-day SMAs on Saturday to settle at $142. Sunday saw SOL attempt to push back above the 200-day SMA, but buyers lost momentum, allowing sellers to push the price below $140 to $138. The current week began with significant selling pressure across markets. As a result, SOL fell to a low of $109 before demand picked up and the price pushed up to $129. The current session has seen a strong recovery, with SOL up by almost 9% and trading at $141. Key resistance levels to watch out for are $146 and $151, where the 200 and 50-day SMAs are currently located.
If SOL can push above $150 and close above this level, it will signal a significant reduction in selling pressure. However, If the price is rejected at these levels, sellers will look to push SOL back towards $120. If this level is breached, SOL could drop as low as $100.
Cardano (ADA) Price Analysis
Cardano’s (ADA) fall saw the price lose crucial support levels as it dipped to a low of $0.277 on Monday. ADA, which had been in a downward trend since mid-July, saw bearish sentiment intensify on Friday as the price fell by 7.38% to $0.364. The weekend began with considerable volatility on Saturday, as ADA posted a marginal increase. However, the price fell back in the red on Sunday, slipping below $0.35 after a 5.75% drop and settling at $0.344. The marketwide selloff also took its toll on ADA, as its price plummeted by 9.30% to $0.312.
Source: TradingView
ADA hit a low of $0.277 on Monday, but demand picked up at lower levels thanks to traders buying the dip, allowing the price to climb back above $0.30. ADA is up over 6% during the current session, as bulls attempt to drive the price above $0.35. With the sharp selling pushing the RSI into the oversold zone, a relief rally was expected. However, sellers are expected to defend the $0.35 level. Should ADA be able to push past $0.35, a move towards the 20 and 50-day SMAs could be on the cards.
Tron (TRX) Price Analysis
Tron (TRX) was one of few altcoins that saw relatively less selling pressure, despite being in the red for nearly all of last week. TRX fell below $0.130 on Wednesday and had dipped below the 50-day SMA by Friday after a drop of just over 4%, which dragged the price down to $0.123. With the 200-day SMA acting as a dynamic level of support, TRX was able to register a positive weekend in the face of unprecedented selling pressure. TRX rebounded from the 200-day SMA on Saturday, rising by 1.27% to $0.125. Sunday saw an attempt to move above $0.130. However, demand dried up close to this level, leading to buyers losing momentum. As a result, sellers pushed the price down to $0.126. Despite the drop, TRX registered an increase of 1.36%.
Source: TradingView
The current week began with the crypto markets in the red. TRX also fell back, dropping by 4.12% to go below the 200-day SMA and settle at $0.121. TRX is marginally up during the ongoing session, as buyers look to push above the 200-day SMA. If TRX recovers this level, it could move above $0.125. However, if it is unable to do so, it means it still faces considerable selling pressure. In such a scenario, it could fall back towards $0.120.
SEI Price Analysis
SEI has dropped over 32% during the past week, as selling pressure drove the price below $0.30. Despite the drop, the price has steadily recovered during the current session. SEI has mostly been trading in the red since July 22, when it hit a high of $0.417. By the beginning of the previous week, SEI had slipped below the 20 and 50-day SMAs, as bearish sentiment began intensifying. By Friday, SEI lost the $0.30 level, as sellers yanked the price down to $0.279 after a drop of 8.18%.
Source: TradingView
SEI remained bearish over the weekend, recording a 4.23% drop on Saturday and a 6.46% drop on Sunday to settle at $0.250. On Monday, it went below $0.25 after a drop of over 9% to settle at $0.227. Sellers had managed to push SEI to a low of $0.203, but demand picked up at lower levels, allowing the price to rise to $0.227. SEI is up by almost 5% during the current session as it looks to reclaim the $0.25 price level.
Cosmos (ATOM) Price Analysis
Cosmos (ATOM) slipped below $6 on Tuesday after losing the lower end of its narrow trading range. With bearish sentiment prevailing all of last week, ATOM had dropped to $5.35 by Friday after a significant drop of 7.12%. ATOM continued its downward trajectory over the weekend as well, dropping by 4.37% on Saturday and a further 1.50% on Sunday. ATOM ended the weekend at $5.04.
Source: TradingView
The price fell further on Monday, hitting a low of $4.04 as selling pressure intensified across the market. Bears lost momentum at lower levels as demand picked up, allowing ATOM to settle at $4.65; the current session sees the price up by 3.28% as buyers attempt to reclaim $5. If ATOM can reclaim $5, it could move towards $5.50 or $6. However, if it cannot do so, it indicates that the selling pressure is still dominating, and the price could drop to $4.50 or lower.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
