After touching recent highs of $64,653 for Bitcoin and $2,815 for Ethereum, in a sudden move backward, the cryptocurrency market had sharply backpedaled on Thursday, with Bitcoin shedding more than 6% and Ethereum dropping more than 7%.
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This sudden fall has left many analysts and investors wondering about the future course of some of the top digital assets, hence underlining how volatile the market is wrought by macroeconomic events and changing mood among investors.
📊 Crypto’s latest retrace is coming after longs were pouring in on exchanges like @dYdX at the highest rate since Bitcoin’s All-Time High craze in March. Greed suddenly came pouring in on August 25th, and liquidations happened swiftly. When funding rates get extreme in either… pic.twitter.com/siXhAI46VQ
— Santiment (@santimentfeed) August 27, 2024
Meanwhile, based on figures provided by Santiment, long positions have been transpiring at the fastest rate since Bitcoin’s peak in March, which is indicative of a spike in market optimism-or perhaps greed-around August 25th.
Economic Factors At Play
Likewise, speculations of US monetary policy are one of the key drivers for this recent change in price. Federal Reserve Chairman Jerome Powell hinted at a probable interest rate cut this year in the last meeting, adding more fuel to speculation of more liquidity in the market.
Since there is a traditional weakening of the US dollar when interest rates are low, it makes cryptocurrencies more attractive to investors.
According to Ryan Lee, the chief analyst at Bitget Research, Bitcoin may range between $54,000 and $72,000, while Ethereum may range between $2,250 and $3,350 in September. But again, these are not without their own set of disclaimers since the market is always open to surprises which might change this trend.
Trading Volume And Market Activity
Despite the declines, however, trading volume has jumped. Whereas an upsurge in trading volume could indicate panic selling by investors attempting to cut their losses, it might also be interpreted as quite the opposite – that investors feel bullish and are buying into what they perceive to be undervalued prices in anticipation of a market recovery.
For example, the trading volume of Bitcoin exceeded $30.5 billion, a 30% rise. It also usually means that some traders are closing their positions while others are…
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