What’s going on in the crypto market led by Bitcoin, which has lost about 13 percent in one day?
Bitcoin, the world’s largest crypto currency in terms of market value, experienced the biggest drop since the collapse of Sam Bankman-Fried’s crypto exchange FTX in November 2022, which until recently was touted as the “white horse prince” of crypto, by 7.2 percent in the last 24 hours. It has lost value. It is a well-known fact that investors, shrugging off the harsh conditions of the crypto winter, are expecting a new bull market towards the end of 2023. So what’s going on in the crypto market? Will the bear market last much longer than thought?
SpaceX has left its mark on the crypto money market, which has been dominated by stagnation for days. SpaceX, the space company founded by Elon Musk, has been found to sell Bitcoin. The company, which disposed of $ 373 million worth of BTC, made the collapse in cryptocurrencies inevitable.
The leader of cryptocurrencies, which started to decline from $ 27,780, is directly anchored at $ 25,140 with the effect of FUD news. BTC, which lost 12.60 percent in a very short time, shook the liquidation data with it. $1 billion worth of transactions have been liquidated in the last 24 hours. While more than 170,000 crypto investors were liquidated, the largest liquidity in a single transaction was ETH/BUSD on the Binance exchange with $55.92 million.
Weakness in the summer seasons
One of the most fundamental elements by which we can characterize weakness and inactivity in Bitcoin is the market cycle. The market cycle is a phenomenon observed in all financial assets, not just cryptocurrencies. Investors, who started to leave the markets as the summer months approached, naturally pulled many data to the bottom. On the Bitcoin side, this situation broke a record. BTC, which has reached the lowest volatility of all time in 30-day data, has thoroughly annoyed the crypto investor.
The summer seasons are often considered as periods of downward activity for BTC. BTC, which usually lost a great value in May, has undermined the power of investors as they enter this season. As a result, a phrase that is frequently used in cryptocurrencies has been derived: The phrase “Sell in May and go away” appears as an indicator of the danger before the summer months enter.
BTC, which fell from $ 59,400 to $ 28,500 in May 2021, dropped by exactly 51.89 percent. The same thing happened again the next year. BTC, which was $ 32,250 in May 2022, dropped a needle to $ 17,400 and lost 46.06% of its value. The concept of market cycle, which has provided clear data in the recent past, continued its impact this season as well.
Social media phenomenon Efloud, which stands out with its crypto currency analysis, made special evaluations to Coinkolik.com.
Efloud stated that the weakness in the market is a situation that is generally experienced in the summer seasons. Stating that this season’s inactivity is extreme, the phenomenon stated that this effect is seen not only in the crypto market, but also in the gemstones, watch and car sector.
Emphasizing that the markets were wearing down the investors psychologically before entering the last quarter, Efloud stated that the tightening policies were the trigger for this situation and said: “I think that the general recession in the money markets will decrease a little with the last quarter. But I don’t have much expectations before 2024 comes.”
“Investors should stay on the spot and avoid risk”
“Liquidation is not too much in markets where there is a lot of volume. Therefore, it is very normal for the price to go up and down, that is, to create consolidation in a low percentage range compared to the crypto market,” Efloud said, adding: People who have altcoins also want to take a little more risk/transaction. This enables small investors to use it as a fuel, that is, as a liquidation product, especially in the futures markets. In such cutting areas, users should make progress on the spot and use them by reducing their risks to a certain extent.”
Stating that Bitcoin Dominance levels should rise a little more for altcoins to explode, Efloud shared the current Bitcoin Dominance chart for reference:
If the rumor about Tether and the Chinese real estate company were true…
Economy journalist Erkan Öz, on the other hand, said the following in his column published on btchaber.com today:
“Of course, rumors spread with Fud. Of course, the main actor of the rumors is the stablecoin USDT or Tether, which should always be fixed to the dollar. According to the whispers in the market, sir, some of the corporate bonds that Tether keeps in its treasury belong to these Chinese real estate companies, so they may have difficulties etc. If such a situation were to occur, USDT’s dollar parity should have fallen below 1. However, on the contrary, the parity even went above 1 with shock sales. Despite this, I continue to adhere to the main rule of ‘never keep your assets in a single crypto, exchange or stable coin, spread the risk as much as possible’, that’s different.”
“Evergrande, SpaceX and the rumors have been instrumental in sales, thank you. But there is a deeper problem with this table. Defending the view that if there is a problem in liquidity, that is, cash flow, in the global markets, cryptoassets will be deeply affected by it.” Öz, did not neglect to look at the glass half full: “The market may provide new opportunities for those who aim for the 2024-2025 bullish season and those who want to buy slowly.”
“BTC price could drop as low as 19,000 with selling pressure”
Speaking exclusively to Coinkolik.com, Kyrrio Founder Karasu said, “As long as the price of BTC remains below $25,000, the selling pressure will increase significantly. This may trigger decreases up to 19,000,” he said.
For the other side of the coin, namely the possibility of a rise, Karasu said to Coinkolik.com: “If 40 thousand dollars are to be mentioned, it is of critical importance to clearly exceed the 32 thousand dollar band. There is a horizontal movement of the BTC price between 25 thousand and 32 thousand. This movement may offer trade opportunities.”
If positive developments turn negative…
One of the main factors driving the direction of cryptocurrencies is the news feed. Coins related to the impact of positive news can really show big increases. We have witnessed this situation many times recently. For example, ETF news was critical as BTC’s recent peak hit $31,800. Priced upwards by back-to-back ETF applications sparked by BlackRock, BTC gained more than 25 percent in a short time.
The glorious process in BTC became even greater when Ripple news was added to the ETF applications of various companies. Ripple, which has been fighting the SEC for a long time, increased 110 percent during the day as the case progressed in its favor. This increase in XRP, one of the main coins of the crypto market, and Ripple’s lead in the case strengthened the sector’s hand. Finding strength from these developments, BTC managed to maintain its accelerated price structure for a while.
However, as of today, it is not possible to find any positive news that can make BTC attack upwards at the moment. Although there is a news flow that can create activity in various altcoins, this pricing cannot be permanent. The news cycle, which is one of the most critical elements for BTC to see $30,000 again, has become a topic frequently followed by investors, especially with the effect of SpaceX.
Macroeconomics squeezes crypto
When we consider the global financial markets, the monetary tightening policy of the US Federal Reserve (Fed) was one of the items that put the most pressure on the crypto market. Many factors such as interest rate decisions, employment data and unemployment rates have weakened BTC’s price structure for a while.
As of today, Kaiko has published data that refers to the inactivity of BTC. According to new data from Kaiko research, the 90-day volatility indices for Bitcoin (BTC) and Ethereum (ETH) dropped 35 percent and 37 percent, respectively, to their lowest levels in several years. The fact that oil, with a volatility index of 41 percent, lags behind BTC, especially surprised financial analysts. Kaiko analyst Dessislava Ianeva described the current market as unusual.
Fed rate decisions, one of the most relevant data on the industry, continued to challenge the technical structure of BTC. Investor anxiety, which increases as the interest rate decision is approached, has recently shown itself with sales-oriented data. Trying to hold on to the $29,250 support, BTC broke this level down with the negativity in the recent macroeconomic data. All financial investors, not just crypto, follow macroeconomic developments with interest.
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