Traders’ Selling Sentiment Eases, Cryptocurrency Market Rebounds Across the Board
Bitcoin
After hitting a low of $58,433 on Monday night, Bitcoin rebounded to over $61,000 on Tuesday morning, and rose above the support level of $62,000 during the midday session. At the time of writing, the BTC trading price is $62,086, with a 3.4% increase over 24 hours.
Altcoins
Benefiting from Bitcoin’s recovery, all tokens in the top 200 by market cap, except for 8, saw increases. The biggest gainers were Brett (BRETT), up 26% at a trading price of $0.1672, dog wif hat (WIF) up 23.8%, and Dog (DOG) up 22.1%. The biggest losers were Lido DAO (LIDO) down 1.9%, Tellor (TRB) down 1.8%, and Curve DAO Token (CRV) down 1.2%.
The overall market cap of cryptocurrencies is currently $2.29 trillion, with Bitcoin’s market share at 53.5%.
Recent Weakness
Despite the belief that potential sell-offs from Mt. Gox were the cause of the market correction, some analysts have pointed out that the impact of Mt. Gox on the market is not significant. Instead, several analysts have indicated that the cryptocurrency market has simply experienced a typical post-halving shakeout, combined with the common “summer doldrums”.
ETC Group analysts have analyzed the recent weakness in cryptocurrencies, attributing it to various factors including reduced inflows into mainstream coins, increased selling pressure from Bitcoin whales and miners, and added macro risks.
According to data from Bitpush, Bitcoin has fallen by over 20% from its high in March, and altcoins, excluding Ethereum, have seen an average decline of 32.6% from their recent highs. Inflows into crypto assets have significantly slowed down compared to levels seen after the launch of the Bitcoin ETF in the US, with ETC Group analysts suggesting this as a major reason for the market’s inability to reach new highs.
Data from CryptoQuant shows that over the past six weeks, 103,000 Bitcoins have been added to over-the-counter (OTC) wallet balances, with the increase in OTC wallet balances and price declines indicating that these sell orders have not yet found buyers.
Lucas Kiely, Chief Investment Officer of Yield App, stated in a report: “BTC and the broader cryptocurrency market are currently proving that the saying ‘sell in May and go away’ is still applicable, as prices remain subdued. Furthermore, macro factors have always been and are likely to remain the primary driver of Bitcoin prices.”
Kiely added, “US inflation is slowing but still well above the Fed’s 2% target, suggesting that despite this being an election year, the Fed may delay rate cuts until inflation is fully under control. Both traditional and digital asset markets are uninterested, and it’s already showing.”
As for the impending approval of an ETH ETF, Kiely stated, “Market enthusiasm is not high, and Ethereum doesn’t attract as much demand and attention as Bitcoin, so the approval of an ETF or ETH investment fund will not only not drive up ETH prices, but could also become a hindrance to increasing downward pressure.”
Analysts cautioned, “Continued downward revisions in global economic growth expectations, coupled with rising recession risks in the US, could continue to pose challenges to Bitcoin and other crypto assets in the short term. It’s also worth noting that changes in global growth expectations have been the most significant macroeconomic driver of Bitcoin’s performance over the past few months, accounting for over 80% of Bitcoin’s fluctuations in the past six months.”
“Be greedy when others are fearful, and be fearful when others are greedy”
However, ETC Group analysts stated that the recent price declines may have caught traders who are not confident in the long-term prospects of Bitcoin and the cryptocurrency market by surprise, and that prices may have bottomed out.
They pointed out, “Wall Street wisdom holds that individual investors are most bullish at market tops and most bearish at market bottoms. In theory, excessively bullish sentiment signals a market top, while excessively bearish sentiment signals a market bottom. In fact, similar behavioral characteristics can be observed in the cryptocurrency market.”
Analysts stated, “We believe that multiple indicators have shown that positions are imbalanced, market sentiment is bearish, and ‘weak hands’ have mostly exited the market. Considering all these indicators, we believe that the short-term risk/reward has become increasingly asymmetric, with relatively limited further downside risk. Therefore, we believe that the current market collapse represents a good opportunity to increase investments in Bitcoin and crypto assets before significant events occur in the coming months.”
Author: Bitpush News Mary Liu
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Tags
2023 Market Trends
Mt. Gox
Ethereum ETF
Altcoins
Bitpush Daily Market Dynamics
Bitcoin
Federal Reserve
Rate Cuts
Note: All Bitpush articles only represent the author’s views and do not constitute investment advice.
Original Article Link: https://www.bitpush.news/articles/6908312