The cryptocurrency market is in a phase of subdued volatility, with Bitcoin (BTC) price trending sideways. This outlook is correct, but it could end in a week or two and trigger a recovery for both BTC and altcoins.
Why is Bitcoin price falling?
There are four reasons for the recent drop in Bitcoin prices.
- Concerns of a recession caused by uncertain macroeconomic conditions.
- Geopolitical tensions due to the Palestinian-Israeli war.
- The US government is selling BTC.
- Donald Trump's chances of winning the 2024 presidential election against Kamala Harris have decreased.
As of August 19, BTC price has fallen by 1.62% and is currently trading at $58,355. Investors can expect a relief bounce in the cryptocurrency market as BTC is trading above last week's Value Area Low (pwVAL) of $57,958. Investors can expect the bellwether cryptocurrency to record last week's Point of Control (POC) of $59,384.
While the start of the week may look bearish, investors can expect Bitcoin price to rise by nearly 2% and form a local top around $59,600. In the optimistic case, BTC may retest the psychological level of $60,000.
Cryptocurrency services firm Matrixport recently published its view on Bitcoin price, predicting a possible recovery in the coming weeks. The company’s thesis is based on the relationship between BTC funding rates and cryptocurrency trading volumes in South Korea.
Matrixport added that South Korean traders play a key role in the cryptocurrency market. The firm suggested that funding rates may decline further as South Korean trading volume has fallen below $1 billion for three consecutive days.
However, one key point made by Matrixport is that Korea Blockchain Week, which will be held in the first week of September, could play a role in reviving the sluggish cryptocurrency market and spurring trading activity.
Crypto Market Prepares to Buy on the Dip
According to data from Santiment, stablecoin deposits surged on Aug. 5, when the price of Bitcoin crashed to $48,914. The rise suggests investors are preparing to buy at the lows.
Additionally, the supply of Tether (USDT) on exchanges has surged from 15.68 billion to 16.72 billion over the past week, a 6.63% increase that confirms investors are looking to accumulate BTC and other altcoins in case the crypto market falls further.
Overall, investors can expect bullish Bitcoin prices in the coming days, with the rest of the altcoins following suit.
Frequently Asked Questions (FAQ)
There are four main reasons why Bitcoin prices are falling: recession fears, geopolitical tensions, the US government's sale of BTC, and the declining chances of Donald Trump defeating Kamala Harris in the 2024 presidential election.
Indicators such as the relationship between BTC funding rates and crypto trading volumes in South Korea, the upcoming Korea Blockchain Week, and a surge in stablecoin deposits and Tether (USDT) supply on exchanges point to a potential resurgence of Bitcoin and altcoins.
Investors expect the price of Bitcoin to rise by nearly 2%, form a local top around $59,600 and potentially retest the psychological level of $60,000. Moreover, a strong recovery in Bitcoin price could see other altcoins rise along with it.
Akash Girimasu
Akash Girimath is an engineer by training with a deep interest in the complexities of the cryptocurrency market. As a senior reporter and analyst, he specializes in cryptocurrency analysis and provides his expertise to prominent platforms such as AMBCrypto and FXStreet. In addition to his analytical work, Akash actively trades cryptocurrencies and manages a small cryptocurrency fund for friends and family. His role includes providing insightful market analysis and keeping readers updated on the latest developments in the cryptocurrency world. Follow him on Youtube, X and LinkedIn.
Disclaimer: The presented content may contain the personal opinions of the author and are subject to market conditions. Please conduct market research before investing in cryptocurrencies. The author or publication is not responsible for any personal financial losses.
✓ Share: