The recovery in the crypto markets has lost steam, with Bitcoin (BTC) and Ethereum (ETH) struggling to push above resistance levels, indicating that sellers are active at higher levels.
Markets are expected to remain volatile in the face of continued economic uncertainties, although analysts believe the downside may be limited. Some analysts have also suggested that the dip in major cryptocurrencies presents an excellent buying opportunity for investors.
Bitwise Chief Investment Officer Matt Hougan suggested investors ignore short-term volatility and price cues and instead focus on long-term investing, especially when it comes to BTC.
Time To Accumulate BTC And ETH?
Bitcoin’s (BTC) drop saw several leverage trades flushed out, with some market watchers hinting that panic selling could have resulted in a short-term bottom for BTC and ETH. According to QCP Capital, it is an excellent time to start thinking about accumulating BTC and ETH. However, there are contrasting views, with another set of analysts, such as 10x Head of Research, Markus Thielen, who believes that a good entry point for BTC is in the low $40,000 zone, from where the cryptocurrency could attempt a significant rally.
David Gokhstein, the founder of Gokhstein Media, shares this opinion, stating that a drop to $50,000 or $40,000 is an excellent opportunity to buy BTC. However, the broader crypto markets do not look too optimistic. The Bitcoin bull-bear market cycle indicator has flashed a bear signal for the first time since January 2023. According to CryptoQuant founder Ki Young Ju, if this indicator remains bearish for two weeks or more, it could suggest a sustained bearish phase.
What Next For The Crypto Markets?
The dramatic selloff in the crypto markets over the weekend and Monday left investors spooked and tested Bitcoin’s reputation as a safe haven asset. The crypto selloff proved that BTC isn’t as cut off from price swings in the traditional markets as once thought. Many questioned the asset’s reputation of “digital gold.” As stock markets crashed, the crypto markets were also impacted, with BTC dropping over 18% and slipping below $50,000. While it eventually recovered to push back above $55,000, it remains some way off from the previous week’s levels.
ETH registered a dramatic fall as well, almost slipping below $2,100. Hougan urged traders to watch for signs such as forced crypto liquidations, the financial health of major crypto firms, and inflows/outflows for spot crypto ETFs. According to Grayscale’s Head of Research, Zach Pandl, BTC will decline to some extent should there be a recession in the US.
“Downside risks to token prices are lower than in the previous cycle, in our view, due to relatively low altcoin valuations, limited credit/leverage in crypto markets, and institutional demand for spot #Bitcoin and #Ethereum ETPs.”
However, analysts at Bernstein were more optimistic, stating,
“If rate cuts and monetary liquidity is the usual template response to US recession fears, we expect ‘hard assets’ such as bitcoin (digital gold) to reprice up.”
Bitcoin (BTC) Price Analysis
Bitcoin’s (BTC) recovery has stalled around the $57,000 price level, indicating the presence of sellers at this price point. While BTC’s recovery from multi-month lows is a relief for investors, the world’s largest cryptocurrency still faces significant challenges ahead. The short-term outlook remains choppy, although accumulation by BTC whales suggests a strong belief in the asset’s long-term prospects. Data shows that whales bought over 358,000 BTC in July, with the trend continuing into August.
However, BTC’s recent price movements have concerned some market observers who sense market uncertainty despite the asset recovering from its multi-month lows. The price chart shows BTC’s recovery stalling around the $57,100 mark, with sellers active at these levels preventing a sustained price increase. According to trading resource Material Indicators, markets could go either way given current buy and sell liquidity. With current market sentiment, it’s no wonder BTC traders have adopted a wait-and-watch approach. QCP Capital has also communicated to traders to monitor macro correlations.
“While the initial shock may have passed, we foresee continued selling pressure in the coming days as systematic funds continue to pare exposure in light of the heightened volatility. We recommend keeping a close eye on Nasdaq, Nikkei, and USDJPY as cross-asset correlations remain high in the near term.”
Looking at the price chart, we can see BTC’s collapse on Monday, which saw the price dip to a low of $49,351. The price recovered from this level as demand picked up at lower levels, allowing BTC to settle at $54,274. As markets recovered on Tuesday, BTC registered an increase of 3.50% and climbed above $55,000 to settle at $56,172. However, its recovery stalled on Wednesday, indicating that sellers were still active. The price fell by 1.83% after sellers thwarted a move towards $60,000 and settled at $55,144. The current session sees BTC up by just over 4% as it looks to consolidate above $57,000 and set itself up for a push to $60,000.
Source: TradingView
If bulls want to maintain the recovery, they must consolidate above $57,000. A close above this level could allow BTC to push towards $60,000. However, if the price turns bearish, it could drop below $55,000, possibly sliding to $50,000. If BTC drops but stays above the $49,000-$50,000 level, it would indicate a bottom has been made, and we could see a strong rebound from these levels. However, bulls must defend this level, as losing it could open the doors to a drop below $45,000.
Ethereum (ETH) Price Analysis
Ethereum’s relief rally has also stalled as it struggles to get past $2,500. ETH opened the week with a significant crash of 9.95% as the price tumbled on the back of a marketwide selloff. ETH hit a low of $2,131 before recovering and settling at $2,421. The price recovered on Tuesday as markets showed signs of recovery, with ETH hitting a high of $2,554. However, with sellers still active, ETH’s recovery stalled, with sellers forcing the price back below $2,500 and settling at $2,464. ETH fell back in the red on Wednesday as sellers attempted to drive the price back below $2,400. ETH eventually settled at $2,343, a drop of almost 5%.
Source: TradingView
The current session sees ETH up by 3.77%, recovering and moving back above the $2,400 price level. While ETH is struggling, on-chain data has shown signs of bullishness. Spot Ethereum ETFs recorded inflows of 44,447 ETH worth around $110 million on Wednesday. Additionally, data from Santiment has shown increased activity in long-dormant wallets. ETH retains considerable buyer interest at the $2,100 level. As such, it is crucial that bulls keep the price above this level to see sustained bullish momentum that could fuel a move above $2,500 to $2,800. If both these levels are surpassed, the next level of resistance sits at $3,000.
However, this outlook would be invalidated if ETH slips below $2,000. Such a scenario would bring $2,000 into focus. Bulls must keep ETH above this level to prevent a price breakdown.
Solana (SOL) Price Analysis
Solana’s (SOL) impressive recovery has continued, with the altcoin rallying 39% from its crash low to surpassing the $150 mark. The market crash saw SOL hit a low of $110, only to make a stunning recovery in subsequent sessions. SOL’s recovery can be gauged by looking at the chart, with the price already at its pre-weekend levels. After slipping below $150 over the weekend, SOL and other cryptocurrencies crashed on Monday, hitting a low of $109. However, it recovered to some extent on Monday itself, as lower-level demand pushed the price up to $129.
Source: TradingView
SOL skyrocketed on Tuesday, surging by 11.33% to settle at $144, but faced substantial volatility on Wednesday. Buyers pushed the price to a high of $155 on Wednesday but lost momentum at higher levels, allowing bears to capitalize and drive the price back below $150 to $144.77. However, SOL has recovered during the current session and is up by over 6% to push above the 50 and 200-day SMAs and the $150 mark. If SOL’s current rally continues, it could attempt to go above $160. However, sellers are expected to defend this level. If sentiment does turn bearish, sellers will try to drive the price to $120. On the other hand, a break above $160 could open the doors for a potential move towards $180. For this to happen, SOL must close above $150.
Toncoin (TON) Price Analysis
Toncoin (TON) has surged past the resistance at $6.04, hitting pre-weekend levels as the altcoin makes a strong recovery despite facing a significant pullback on Tuesday. TON hit a low of $4.86 on Monday as markets crumbled. However, it rebounded quickly, suggesting that bulls were aggressively defending the level. Buyers pushed TON back above $5, allowing it to settle at $5.30. Bulls took control on Tuesday, as the price surged by almost 10% to $5.81. Buyers did attempt to move above $6, but with sellers active at this level, TON fell back below $6.
Source: TradingView
Bearish sentiment returned on Wednesday as TON dropped by 6.51% to $5.43. However, TON has surged by a staggering 17.56% during the current session, as buyers eye $6.50 after breaking past the $6.04 resistance. Analysts had expected a steady upswing to $6.50 if TON could push above $6, but the current rally has defied expectations. If TON’s current rally remains intact, it could surge past $6.50 as well and set itself up for a move to $7. However, if sellers are able to reverse the price, we could see a drop back to $6.
Polkadot (DOT) Price Analysis
Polkadot (DOT) plunged during the market rout on Monday, dipping to its multi-year support of $3.6. Selling pressure on Monday pushed DOT down by over 10% to $4.21. However, sellers had managed to drive the price below $4 to a low of $3.61 before demand picked up. DOT recovered and pushed back above $4 to close at $4.21. As markets recovered, so did DOT, registering an increase of just over 7% to settle at $4.51. The price increased to $4.58 on Tuesday and is up by almost 4% during the current session as buyers look to reclaim $5.
Source: TradingView
DOT’s support at $3.6 has been intact since October 2020, with the bottom being established just before DOT’s staggering 233% rally. The long tail behind the candle on Monday shows the strength of demand at this level, allowing DOT to rebound above $4. DOT’s RSI is also just above the oversold zone, meaning DOT’s availability at discounted prices is attracting buyer interest. Network activity on DOT has also picked up, according to data from into-the-block. Active addresses on Polkadot’s Relay Chain have also increased from 5,630 to 7,030.
Cardano (ADA) Price Analysis
Cardano (ADA) has been trading in a downward trend since July 21. However, bearish sentiment increased over the weekend and Monday as markets underwent a significant correction. ADA dropped to a low of $0.277 on Monday before buyers could prop the price back above $3 to $0.312. Bulls attempted a relief rally on Tuesday, and ADA rose by 6.41% to $0.332. However, bulls lost momentum, and ADA fell back in the red on Wednesday, dropping by 2.41% to $0.324. The current session sees ADA up by 3.40%. If buyers can sustain momentum, ADA could move above $0.350.
Source: TradingView
A close above this level could allow ADA to test the resistance around the 20 and 50-day SMAs. However, if the price turns bearish, it could retrace back to $0.300.
Dogwifhat (WIF) Price Analysis
Dogwifhat (WIF) and other Solana-based meme coins have seen a sharp recovery as SOL made a staggering recovery following Monday’s crash. WIF, which was trading in the red since July 22, has registered a 22% jump after weeks of decline. Like other altcoins and meme coins, WIF collapsed on Monday, dropping by almost 13%. The popular meme coin nearly lost the $1 level as sellers yanked the price to a low of $1.07. However, it recovered from this level to end Monday at $1.26.
Source: TradingView
Bullish sentiment took control as markets and SOL recovered on Tuesday, strongly impacting WIF. As a result, WIF registered an increase of 12.50% to settle at $1.41. Bullish sentiment intensified on Wednesday, with WIF reaching a high of $1.77. However, with sellers active at higher levels. WIF fell back, eventually settling at $1.60, an increase of over 13%. The current session sees WIF up by almost 5% and trading at $1.67. However, while WIF has made impressive gains over the past few days, its overall outlook remains bearish. The asset is down almost 17% over the past week, and trading volume has also declined.
Analysts were worried about a drop below $1, but the recent surge has allayed those fears for now. If bulls can maintain momentum, WIF could push above the 50-day SMA and test the $2 price level.
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.
