Cryptocurrency markets show significant bearish momentum this Saturday after trading sideways most of last week. Bitcoin price is struggling to hold above the $20k range, while Ethereum is likely to break down through the $1,500 support. In addition, the global cryptocurrency market cap has dipped below the $1 trillion range, losing over 4.48% in valuation in the past 24 hours. The bears are making their presence known today, as prices are dropping and trading volume is increasing.
- Bitcoin price struggles to hold above $20k while Ethereum drops to $1,500
- Global cryptocurrency market cap falls below $1 trillion, signaling the market’s bearish pressure.
- The Fear and Greed index shows the market is in extreme fear.
- The likely culprit behind today’s bearish momentum is the Fed’s plans to raise interest rates.
- Despite the recent price drop, long-term sentiment remains bullish, and now is an excellent time to open long-term positions.
Crypto Market Update
While cryptocurrency markets are usually quiet over the weekend, this time, it’s different. Bitcoin and Ethereum are down by over 4%, with a sharp increase in trading volume as a significant amount of cryptocurrency is exchanging hands.
While Bitcoin is struggling to hold support at $20k, the 24-hour trading volume is up by over 40%, currently at $42.9 billion. In addition, Ethereum is showing a 7.63% decrease, with an even more significant increase in trading volume of over 60%.
According to the traditional definition and analysis of trading volume and market patterns, a decrease in price with an increase in trading volume suggests a bearish pattern. Combined with the fact that the global crypto market cap dipped below the $1 trillion range, the bloodbath is likely not over.
Looking at alternative.me’s Fear and Greed index; it’s not surprising to see the market in full Fear mode at 28 points.
While the Fear index was one point lower yesterday, at 27 points, we’re likely to see an additional increase in fear this weekend as markets continue to drop.
One reason for the substantial decrease in price today might be attributed to the Federal Reserve’s plans to continue raising interest rates to curb inflation. According to Jerome Powell, Chair of the Federal Reserve of the United States, increasing interest rates is the “unfortunate cost of reducing inflation.”
While the market thought the Fed would ease on its monetary policy after July’s CPI data release, which showed a net zero increase in prices, it seems that the Fed’s rate hikes aren’t over yet.
Every time the Fed increases interest rates, it creates bearish pressure for stock markets. Since Bitcoin closely follows stock market price action, the bearish momentum cascades to Bitcoin, affecting other crypto assets like Ethereum, BNB, Solana, etc.
Even with Ethereum’s upcoming merge, it seems the digital asset can’t escape the bears, which managed to push ETHUSD down by over 7% in the past 24 hours.
Despite the adverse market conditions this weekend, those looking to open long-term positions could capitalize on the market’s fear and pick up crypto assets, NFTs, virtual real estate, and other underpriced coins for low prices. Some excellent buying opportunity includes Web3 tokens, Metaverse coins, virtual real estate, and much more.
We’ll likely continue to see bearish pressure until next week when markets will find new support and resume trading sideways at a lower range. BTC will probably hold above $20k, while ETH will attempt to establish newfound support at the $1,500 range.
Moreover, the global crypto market cap is a crucial price range to keep an eye on. As long as it’s below $1 trillion, one can assume that we’re in bearish territory. The global crypto market cap must remain above the $1 trillion range for crypto assets to prevent further retracements.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any service.
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The post The Bears Make Their Presence Known, Bitcoin Price Dips to $20K, Ethereum Drops to $1,500 appeared first on The Merkle News.
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