Markets
When will the cryptocurrency market rise again?
Ongoing repayments to Mt. Gox creditors are compounding the current wave of crypto bearishness, driven by growing selling pressure Bitcoin (BTC) miners and whales. According to on-chain data from Glassnode, more than 21,000 Bitcoins, worth over $1.2 billion, were transferred to cryptocurrency exchanges last week.
On-chain data reveals that several Bitcoin and Ethereum (ETH) whales, who had loans secured on various decentralized applications (Dapps), have been liquidated over the past 24 hours. This has significantly impacted market stability, contributing to an increase in selling pressure.
Over the past 24 hours, over $636 million worth of crypto derivatives trades have been liquidated, predominantly affecting long traders. This mass liquidation has intensified market volatility, reflecting the broader sentiment of fear among investors.
As reported by Coinpedia, the Fear and Greed Index has fallen from 44 (neutral) to 29 (fear) in the past 24 hours. This sharp decline highlights the growing anxiety and uncertainty among investors in the market.
What’s next for Bitcoin?
With Mt. Gox set to continue its cryptocurrency distribution over the next three months and the ongoing Bitcoin selloff from the German and US governments, the market is facing a major capitulation reminiscent of the FTX collapse.
From a technical perspective, if Bitcoin fails to hold the $56,000 support level, it could find solid support around $52,500 in the near term. This potential drop underscores the fragile state of the market.
Bullish Cycle Outlook: Lessons from the Past
Despite the current slowdown, the possibility of a cycle top for the 2024 crypto bull run cannot be completely ruled out. Historical patterns from previous major bull cycles suggest that the rally is far from over.
Some analysts argue that the 2024 cycle mirrors the 2017 cycle, which saw several 25-30 percent pullbacks before peaking around $20,000.
Matrixport argues that the cryptocurrency bull cycle will eventually gain momentum, especially as the U.S. general election approaches and expected interest rate cuts come into play. Furthermore, the cryptocurrency market is expected to follow major stock indices such as the S&P 500, which recently hit new all-time highs.
The cryptocurrency market is a wild ride! Are you buying the dip or selling on the news? Weigh it up with your strategy.
Read too: How far can Bitcoin’s price fall in this cryptocurrency market crash?