The cryptocurrency market shows signs of an incoming correction hours before the U.S. Consumer Price Index report is released.
The global crypto market capitalization declined 3.3% in the past 24 hours, sitting at $2.22 trillion, per data from CoinGecko. The market-wide trading volume has been moving between $80 billion and $87 billion as bears continue to dominate.
Bitcoin (BTC) plunged below $61,000 and is trading at $60,800 at the time of writing. The leading cryptocurrency briefly touched an intraday low of $60,300 earlier today.
According to data provided by Santiment, whale transactions consisting of at least $100,000 worth of BTC declined from 10,098 to 8,176 over the past day. Declining whale activity usually hints at market uncertainty or selloff from retail traders.
Notably, the BTC funding rate recorded a strong surge from 0.004% to 0.007% over the past 24 hours. The indicator shows that the amount of bets on Bitcoin’s price movement is mostly bullish. However, a fall below the $60,000 mark could bring increased liquidations, and consequently, a further correction.
Bitcoin’s Relative Strength Index is currently at 45, per Santiment data. The RSI shows that BTC is currently at a neutral zone ahead of the U.S. CPI report, scheduled for today.
The U.S. CPI for August came at 2.5%, a level not seen since March 2021, and is expected to drop to 2.3%. This could increase the chances of another rate cut at the Federal Open Markets Committee meeting on Nov. 6 and 7.
One of the bullish catalysts for last week was the U.S. jobs report, sending the BTC price above $64,000. If the U.S. inflation cools down again, bullish momentum would be expected in financial markets, including crypto.
Toncoin experienced a sharp 27% drop to $5.04 in the wake of Pavel Durov’s arrest. Although the price has since stabilized slightly above that level, the situation remains precarious due to the ongoing investigation surrounding the Russian Zuckerberg. Despite the temporary stabilization, the indicators present a bleak outlook for Toncoin, suggesting potential downturns regardless of the investigation’s outcome. The analysis below outlines the factors contributing to this grim forecast.
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Toncoin slips below 50 and 200 MAs
Toncoin’s price fell beneath both the 50-day and 200-day moving averages (MAs) on the daily chart. The 50-day MA reflects short- to mid-term market sentiment, while the 200-day MA captures the long-term trend. A position below both indicates a sustained loss of momentum, which makes it difficult for TON to regain upward traction quickly.
Moreover, Toncoin now faces the prospect of a death cross, where the 50-day MA may cross below the 200-day MA. This is a strong bearish signal and often leads to major declines.
Bollinger Bands signal weakness for Toncoin
On the weekly timeframe, TON currently trades below the middle line of the Bollinger Bands and sits near the lower band. When a price is below the middle band, it suggests that the asset is underperforming relative to its recent average. And trading near the lower band indicates that the price is approaching the lower end of its expected range, signaling potentially oversold conditions.
Stochastic RSI shows no relief for Toncoin
The Stochastic RSI on Toncoin’s weekly chart now sits in the oversold region, below the 20 level. In other words, the selling pressure has dominated to the point of exhaustion. Although a recent bullish crossover occurred, indicating a possible reversal, in reality, the signal proved misleading. Now, a bearish crossover has taken place, thus the downward momentum is gaining strength rather than subsiding. The implications are clear: Toncoin continues to face strong selling pressure, with little indication of a near-term recovery.
Toncoin’s MACD shows growing downward pressure
The MACD on Toncoin’s weekly chart has also confirmed a bearish signal. A bearish crossover occurred when the MACD line crossed below the signal line. The distance between the two lines has continued to widen (reflected by the expanding histogram), which indicates that the downward momentum is not just persisting but intensifying.
Toncoin’s recovery unlikely as DMI stays bearish
The Directional Movement Index (DMI) on Toncoin’s weekly chart also shows a clear bearish trend. The -DI (orange line) represents the strength of the downward movement and currently stays above the +DI (blue line), which signals stronger bearish momentum. The ADX (yellow line), which measures the overall strength of the trend, continues to decline, indicating of a loss of bullish momentum. The downward pressure remains firm, suggesting that Toncoin’s recovery may not materialize soon.
Closing thoughts
In addition to the technical indicators pointing to downward pressure for Toncoin, it’s crucial to consider the broader macroeconomic outlook. Although relying solely on historical performance can be misleading, patterns and external factors still provide valuable context.
Historically, September has been a challenging month for the crypto market. Since 2013, it has ended positively only three times, while the rest have recorded losses. On average, the market has experienced a 4.51% decline in September.
Source: CoinGlass
A more major concern lies in the monetary policy landscape of the United States. Looking ahead to the Federal Reserve’s September 18th meeting, the probabilities for a rate cut are non-existent, and the chances of a rate hike remain high. Federal Reserve Chair Jerome Powell’s recent statement, “The time has come for policy to adjust,” shows a likely shift in monetary policy. Historically, cryptocurrencies tend to react negatively during periods of rate cuts until the cuts stop and policy stabilizes. Given this, the broader crypto market, including Toncoin, may face further declines in the coming months before potentially transitioning into a bullish trend towards the end of 2024 and into 2025.
Source: CME
While historical performance does not guarantee future outcomes, these factors are essential considerations for any investor. At present, the uncertain market conditions make investments in Toncoin, Bitcoin, Ethereum, Solana, and any other cryptocurrencies particularly risky.
As expected, the bearish start in September has brought an increased amount of liquidation to the cryptocurrency market.
According to data provided by Coinglass, the total amount of crypto liquidations increased by 176% in the past 24 hours and is currently sitting at $155 million. Most of the liquidations came from Bitcoin (BTC), worth $45.6 million — $36.7 million longs and $8.9 million shorts.
Ethereum (ETH) witnessed $39.7 million in liquidations — $32.2 million longs and $7.5 million shorts — per data from Coinglass.
The increased liquidations come as the global cryptocurrency market capitalization dropped by 2.7% over the past day, currently hovering at $2.1 trillion, according to CoinGecko data. N
BTC slipped by 1.5% in the past 24 hours and is trading at $57,500 at the time of writing. ETH recorded a 2% drop and is currently changing hands at $2,440.
Data from Coinglass shows that the largest single liquidation order, worth $10 million in the BTC/USDT pair, happened on Binance, the leading cryptocurrency exchange by trading volume.
Binance saw a total of $74.5 million in liquidations, followed by OKX’s $49.9 million.
According to Coinglass, bears have usually been dominant in September with the Bitcoin price seeing negative momentum in eight of the last 11 years. On average, BTC declined by 4.53% over the past 11 years in September.
Notably, the Bitcoin price witnessed bearish momentum in the third quarter of the past two years. Per Coinglass, BTC declined by 2.5% and 11.5% in Q3 2022 and 2023, respectively.
It’s still important to keep an eye on macroeconomic events which could potentially change the market direction.
What caused Bitcoin and Ethereum to plunge into a liquidation spiral? With traders losing millions, how did market conditions shift so quickly, and what’s next?
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The crypto market is playing a game of hide and seek, with Bitcoin (BTC) and Ethereum (ETH) leading the charge as they hover around key price levels.
The entire crypto market has been in a state of distress, losing approximately 15% of its value between Jul. 29 and Aug. 28. The market cap has declined from $2.48 trillion to $2.11 trillion, reflecting the widespread bearish sentiment.
As of Aug. 28, Bitcoin has taken a fresh tumble, dropping over 4% in the last 24 hours to trade at $60,000 levels. This decline followed a near dip to $58,000 before a slight recovery.
Just a month ago, on Jul. 27, BTC was comfortably sitting at $69,400, marking a sharp decline of about 14%.
BTC 6-month price chart | Source: TradingView
On Aug. 27, spot BTC ETFs experienced heavy outflows, with around $127 million pulled out, marking the first day of outflows after eight consecutive days of inflows. This shift could be a key factor behind the sharp correction we’re witnessing.
Meanwhile, ETH has mirrored BTC’ moves, with its price dipping nearly 4% to its current level of $2,500. However, ETH’ journey over the past month has been even rockier, experiencing a 22% drop in just 30 days.
ETH 6-month price chart | Source: TradingView
The challenges for ETH have been intensified by spot ETH ETFs, which saw cumulative outflows of over $115 million between Aug. 15 and Aug. 27, with no signs of positive inflows.
Massive liquidations rock the crypto market
The recent sharp downturn in the crypto market can be traced to several interconnected events, creating a perfect storm for the sell-off we’re witnessing.
In the last 24 hours as of Aug.28, nearly $320 million in crypto positions have been liquidated, according to Coinglass data.
A vast majority of these liquidations hit long traders, who faced losses of $261 million, dwarfing the $58 million in short liquidations, indicating that many traders were betting on the market going up, but the market had other plans.
Bitcoin led the charge in these liquidations, with over $101 million wiped out. Of this, $82 million came from long positions, meaning traders who were confident Bitcoin would continue rising were caught off guard.
Ethereum wasn’t far behind, with nearly $96 million in liquidations, again with most coming from long positions. But why did the market take such a turn?
Just a few days ago, on Aug. 25, Bitcoin’ funding rate on the DyDx exchange hit its highest level since BTC’ all-time high in March, according to Santiment.
📊 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
Funding rates are essentially payments exchanged between buyers and sellers of perpetual contracts to keep their positions open. When these rates spike, it often signals that traders are heavily favoring one side of the market, in this case, going long on Bitcoin.
This overconfidence in long positions was partly fueled by Federal Reserve Chair Jerome Powell’ recent comments, where he hinted at a possible interest rate cut in September.
Many traders took this as a sign to load up on Bitcoin and Ethereum, expecting the market to rally. However, when funding rates get too high in one direction, they can become a ticking time bomb.
Santiment analysts noted that extreme funding rates often lead to liquidations, driving the market in the opposite direction, which is exactly what happened here.
Adding fuel to the fire, news broke on Tuesday that a federal grand jury had returned a revised indictment against former President Donald Trump.
Trump, who has positioned himself as a pro-crypto candidate for the upcoming U.S. presidential election, could influence the market’ sentiment.
CNBC reported that the uncertainty around this political event likely caused traders to go “risk-off,” meaning they sold off their crypto holdings to move into safer assets like cash.
What’s next for the crypto market?
Despite the recent dip, some analysts believe that Bitcoin is still holding strong above crucial support levels.
Michaël van de Poppe, a respected crypto analyst, highlights that Bitcoin remains above a key level at $61,000. According to him, maintaining this level could pave the way for a new all-time high.
He notes that with the current momentum, especially with the excitement around Bitcoin ETFs, there’s a strong possibility that BTC could push higher if it holds this support.
Meanwhile, Ali Martinez, a technical and on-chain analyst, observed that a significant number of top traders on Binance are going long on Bitcoin. In fact, nearly 65.22% of them are buying the dip, betting on a rebound.
CryptoCon, a Bitcoin technical analyst, believes that the recent low volatility phase is nothing new and is part of Bitcoin’s typical mid-cycle behavior. He notes that this phase mirrors similar periods in previous cycles, such as those in 2021, 2017, and 2013.
According to him, those who are prematurely calling the top may soon find themselves left behind as the market resumes its upward trend.
However, not all analysts are entirely bullish. Emperor, another respected figure in the crypto space, offers a more cautious perspective. He has advised traders to be careful, particularly with Bitcoin’s failure to sustain above key monthly and quarterly levels.
Bitcoin Price Update
Everything is numerically marked on the Chart.
We expected a Dump but I did not expect the dump to be this hard and fast, within the first day. But this is why you manage risk.
Emperor suggests that the best strategy right now is to take quick trades rather than hold onto positions for too long.
He views the recent price action as a temporary setback rather than the start of a bearish trend but emphasizes the importance of managing risk and waiting for the price to react before making any large moves.
Caution ahead
For the crypto market to stage a meaningful rebound, BTC must first hold firmly above the critical $60,000 level. This support zone is essential for maintaining market confidence.
From there, the next challenge is to break through the $65,000 resistance, a level that has previously acted as a barrier.
If Bitcoin can clear this hurdle, it could pave the way for a broader market recovery, with ETH likely to follow suit. Once ETH stabilizes and gains upward momentum, other altcoins could also see a resurgence.
However, the U.S. presidential election race is heating up, and the candidates’ policies on crypto could largely impact market sentiment.
Additionally, all eyes are on the Federal Reserve’ next move, with a possible interest rate cut in September that could either bolster or dampen market recovery efforts.
While the potential for Bitcoin to reach new heights exists, it’s important to always manage your risk carefully and avoid making impulsive decisions.
The crypto market is notoriously volatile, so staying informed and only investing what you can afford to lose is the best approach.
Bitcoin’s recent rally could be setting the stage for a downturn, as several indicators suggest. The recent distribution of BTC from Mt. Gox, coupled with the German government’s large-scale sell-off, initially dampened Bitcoin’s price but led to a temporary recovery. However, metrics such as the Net Unrealized Profit/Loss and Stochastic RSI are signaling potential declines ahead. The article examines how these factors might affect Bitcoin’s future movements.
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Mt. Gox distributions and German government sell-offs
July and August brought a cascade of bad news for Bitcoin (BTC). The month began with the turmoil initiated by the German government’s large-scale BTC liquidation and the commencement of Mt. Gox’s distribution process.
The initial wave of selling from Germany triggered a downtrend in Bitcoin’s price, which reached a low of $53,542 on July 5.
Source: Glassnode. Mt. Gox and German government BTC balance change, June-August 2024
The decline was further intensified when Mt. Gox released 2,701 BTC. By then, Germany had already offloaded 9,332 BTC during its selling spree. After July 5, Bitcoin’s market began to recover, even though Germany sold another 59,190 BTC. By July 12, the price had climbed to $57,889, marking an over 8% recovery.
The recovery shows that after the initial selling pressure eased, Bitcoin became more appealing to investors. The market’s ability to absorb the government’s selling pressure hinted at a growing demand. Later, news that Germany had sold all the BTC held in its wallets led to further price appreciation.
Even the larger Mt. Gox movement of 49,079 BTC failed to halt the upward trend, which saw a 26% increase from the July 5 low. Although subsequent distributions from Mt. Gox did create short-lived dips in the market, they did not stop the overall recovery.
1/ @krakenfx has successfully distributed #Bitcoin and Bitcoin Cash from the @mtgox estate back to creditors.
It’s been nearly a decade since Kraken was selected by the Trustee to facilitate the investigation and return of client funds. It was our privilege and it was our duty. pic.twitter.com/ptKexzN4gm
The psychological factor likely played a big role here. Those receiving BTC from Mt. Gox had not been holding the cryptocurrency over the years by choice; they simply had no access to it until the recent distributions. Over time, many may have realized that keeping BTC could be more beneficial than selling it right away. The mindset shift likely came from Bitcoin’s past price highs in 2017, 2021, and even 2024. If they had had their BTC during those peaks, many might have sold their holdings. Instead, the forced delay unintentionally positioned them as long-term holders, which worked to their advantage. The perspective is supported by the market’s reaction to the distributions. The minor 4% drop observed after Kraken and Bitstamp began their distributions on July 24 was quickly absorbed, indicating that the selling pressure from these recipients was relatively low.
The pattern suggests that future distributions of the remaining 65,476 BTC from Mt. Gox are unlikely to cause significant market disruptions. Any potential disruptions are expected to be quickly absorbed by the market, as most recipients are likely to hold rather than sell their assets.
Entity-Adjusted Dormancy Flow as a predictor of Bitcoin market bottoms
Entity-Adjusted Dormancy Flow (EADF) measures the ratio between the current market capitalization and the annualized dormancy value. Dormancy value is the average number of days that each BTC remains dormant (held without being moved) multiplied by the amount of BTC moved on that day and then converted into USD. The metric provides insight into the behavior of long-term holders by indicating how much “older” Bitcoin is being spent or moved in the market.
Source: Glassnode. Entity-adjusted dormancy flow of BTC, 2010-2024
This tool has proven indispensable in timing market lows and assessing whether the Bitcoin market remains within typical parameters during a bullish trend or is shifting toward a bearish phase.
Each time EADF drops into the green zone, between $170 and $250, it signals a market low. The lower band, especially around $170, has consistently predicted Bitcoin’s price bottoms with good accuracy. Recently, on August 5, EADF hit a low of $184, which, based on past data, likely indicates Bitcoin has reached its bottom. The following upward movement of EADF suggests the start of a recovery phase, which, if patterns hold, could lead to an appreciation of Bitcoin’s price in the near future.
Source: Glassnode. Entity-adjusted dormancy flow of BTC, year-to-date
Net Unrealized Profit/Loss as a predictor of Bitcoin market tops
Net Unrealized Profit/Loss (NUPL) is a metric that reflects the overall sentiment of Bitcoin holders by quantifying the difference between the total amount of Bitcoin that is in profit (relative unrealized profit) and the total amount of Bitcoin that is at a loss (unrealized loss). NUPL, therefore, represents the net result of these two figures, indicating whether the market, on average, is in a state of profit or loss.
Source: Glassnode. Net unrealized profit/loss of BTC, 2010-2024
Historically, every time NUPL has risen above 0.4, it has signaled that Bitcoin may be entering a phase of overvaluation. However, this does not necessarily mean that Bitcoin’s price will immediately start to decline. Previously, from 2010-2011, 2013-2014, 2017-2018, and 2020-2021, NUPL remained above the 0.4 threshold for extended periods—sometimes nearly a year—before eventually dropping below it, marking the end of a bullish phase.
Given the current market conditions, it is possible that Bitcoin may stay in the NUPL zone above 0.4, occasionally dipping barely below it, until a market top is reached, which could occur around 2025. However, a closer resemblance might be drawn to the scenario in 2019.
During that year, NUPL reached 0.4 in June and remained at that level until August, after which it began to decline. A key factor influencing this was the Federal Reserve’s decision to lower interest rates starting on July 31. The rate cut, coupled with the subsequent halt in further cuts or hikes, may have contributed to the decline in NUPL and the corresponding downtrend in Bitcoin’s price.
Source: TradingView. BTC price vs. interest rates, 2015-2024
By March 2020, NUPL had dropped below 0, coinciding with the onset of the COVID-19 pandemic and the Federal Reserve’s decision to stop adjusting rates for a prolonged period. Once the Federal Reserve ceased cutting rates, both Bitcoin’s price and NUPL reversed their downward trends and began to rise again. With the Federal Reserve expected to cut rates in September, a similar pattern to 2019 might occur, possibly leading to a decline in Bitcoin’s price.
Source: CMEGroup. Federal Reserve rate target probabilities, September 18 2024
Stochastic Relative Strength Index patterns in Bitcoin market cycles
Stochastic Relative Strength Index (Stoch RSI) is a momentum indicator that traders use to assess the potential direction of an asset’s price by comparing the current closing price to its price range over a specific period. It is an oscillator that measures the level of the RSI relative to its high-low range over a set period rather than comparing price levels. This makes it more sensitive to recent price changes and provides information about potential overbought or oversold conditions.
The Stoch RSI oscillates between 0 and 1, with readings above 0.8 typically indicating overbought conditions and readings below 0.2 indicating oversold conditions. However, rather than just looking at whether the indicator is overbought or oversold, a more nuanced approach involves examining the behavior of the Stoch RSI as it breaches these levels.
Historically, when the BTC’s Stoch RSI has breached its upper band (downward trend), then fallen below the lower band (oversold), and later breached the lower band again on its way upward, Bitcoin’s price has typically experienced a decline. On average, from the open price on the day of the first breach below the upper band to the open price on the day of the first upward breach of the lower band, Bitcoin has seen a decline of -22.89%.
This method is preferred because it avoids the pitfalls of false signals. Simply relying on the Stoch RSI topping or bottoming can be misleading, as the indicator might give false bottoms where it briefly rises before dropping again. By waiting for the sequence of breaches—first of the upper band, then the lower band, and finally the upward breach of the lower band—the analysis achieves a higher success rate, albeit at the cost of potentially being late to the trend.
However, if the anomaly of the 2014-2015 period is excluded, the average drawdown is significantly steeper, around -48.45%. For simplicity, this figure can be rounded to a 50% average drawdown.
Currently, examining the monthly view, Bitcoin has declined by -10.2% from the open prices, which indicates that if the historical trend holds, the price could drop further to around $36,000 this year. Nonetheless, there is an alternative scenario similar to what occurred during the last halving cycle in 2020.
In 2020, the Stoch RSI did not breach the lower band but instead showed a pattern where it breached the upper band, then the middle band, and finally breached the middle band again on its way up. If this pattern repeats, Bitcoin might stabilize around $58,000 to $60,000—a level it is currently hovering around. If this scenario plays out, it could mark the last significant bottom for Bitcoin before the next major bull run, much like what happened after the 2020 halving.
Conclusion
In light of the current indicators, Bitcoin faces a challenging road ahead. With three out of four key metrics signaling bearish trends, the potential for further price declines seems strong. While the dormancy flow indicator remains within its typical range, history shows that it can dip below the lower band, suggesting that downside risks are still present. As a result, our outlook remains cautious, and we expect Bitcoin to stay below $60,000 until at least late September or October.
Ethereum collapses 32% in a week, with an 18% drop in the last 24 hours alone, as the crypto market as a whole records its largest dip this year.
The Ethereum (ETH) price action on the daily chart shows a dramatic decline with the current price at $2,350 down by 12.35% for the day. This drop has pushed Ethereum below the lower Bollinger Band, currently at $2,650, a key index for indicating that the asset may be oversold.
The Bollinger Bands indicate heightened volatility, with the bands expanding significantly. Ethereum’s position below the lower band typically suggests the asset is oversold and might be due for a bounce back, indicating bearish pressure if the price does not recover soon.
ETH’s On-Balance Volume (OBV) confirms this bearish sentiment. The OBV currently stands at 43.49 million, having declined sharply in tandem with the price drop, suggesting that sell pressure is substantion.
As more volume is associated with downward price movements, if ETH’s OBV continues to decrease, this would indicate persistent selling and potential for further declines in Ethereum’s price.
ETH weekly chart at critical condition
The weekly chart shows Ethereum’s situation does not look much better. The price has broken below the lower Donchian Channel, which is at $2,111. Currently, the upper and middle Donchian Channels are at $3,977 and $3,044, respectively.
This breach of the lower channel indicates a strong bearish trend, as it shows the price has reached new lows not seen in the past 20 trading periods. A weekly close below this level could signal further downside risk.
Moreover, the Relative Strength Index (RSI) on the weekly chart currently stands at 38.55, down from a recent high of 54.90. If the RSI drops further below 30, it would confirm an oversold condition, potentially leading to a short-term bounce at or above the $2,800 mark.
However, the current trend shows weakening momentum, and unless there is a strong reversal, ETH’s downward pressure could persist.
What next for Ethereum?
Looking ahead, Ethereum’s immediate future largely depends on its ability to reclaim key support levels. On the daily chart, a recovery above the lower Bollinger Band at $2,650 could stabilize the price.
Meanwhile, on the weekly chart, a move back within the Donchian Channels, particularly above the middle band at $3,044, would be a positive sign.
However, if the current bearish momentum continues, we could see Ethereum testing lower support levels around $2,000, with a possibility of further declines if broader market conditions remain unfavorable.
Analyst Benjamin Cowen argued that Ethereum might stabilize around its current levels in the short term before potentially experiencing another leg down, particularly if macroeconomic conditions, such as rate cuts, play out similarly to past market cycles.
Also, market veteran Peter Brandt suggests that Ethereum is close to hitting its floor. With a rectangle pattern ranging from $4,500 to $2,814, the analyst calculates the downside bottom to be around $2,000, suggesting that this target is almost fulfilled.
The downside target from the rectangle top has almost already been met. But of course, we all know charting does not work. $ETHpic.twitter.com/oQONPEGaBS
The crypto market is facing a downturn as major coins like Solana, Bitcoin, Ethereum, and BNB experience notable price drops.
In the past 24 hours, Solana (SOL) has suffered the steepest decline among them. Following a seeming shift in market sentiment coming on the back of an underwhelming jobs report, Solana’s price plummeted by more than 7% in 24 hours.
The drop outpaced the losses of other leading cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and BNB, which all contributed to the overall value of the crypto market going down by more than 4%.
The downtrend also coincides with the S&P 500 declining for a third week in a row, while the Nasdaq 100 dipped 10% from last month’s all-time highs.
Solana drops 7.8%
Currently priced at $151.44, Solana has seen a sharp decline of 7.8% over the past 24 hours. Its 24-hour trading range was between $148.53 and $167.04, indicating a volatile market.
This decline is part of a broader downward trend, with a 7-day decrease of 18.7% and a 14-day loss of 10.3%.
Despite these short-term setbacks, SOL has managed a 30-day increase of 12.7%, showcasing its resilience in the face of market fluctuations.
Solana’s market cap stands at $70.47 billion, with a 24-hour trading volume of $5.57 billion. Its circulating supply is 465,387,830, with a total supply of 581,500,427 tokens.
BNB dips 5.8%
BNB registered the second-highest dip among the large-cap cryptocurrencies. The coin is currently trading at $540.14 having experienced a 5.8% decline in the last 24 hours. In that time, it traded between $526.70 and $576.88, reflecting the overall market volatility.
Over the past week, BNB has decreased by 8.3%, with a 14-day loss of 8.8%. However, on a yearly scale, BNB has shown a 124.8% gain.
The market cap for BNB is $78.82 billion, with a circulating supply of 145,887,575 BNB.
Ethereum slips 5.3%
Ethereum, the second-largest cryptocurrency, also fell by 5.3% in the past 24 hours and is currently priced at $2,988.15.
ETH’s market saw a 7-day decline of 8.8% and a more pronounced 14-day drop of 14.4%. Over the past month, ETH has also decreased by 5.2%, struggling to maintain momentum.
Despite these challenges, Ethereum’s market cap stands at $359.38 billion, with a 24-hour trading volume of $21.99 billion. The circulating supply is 120,255,176 ETH, highlighting the asset’s significant presence in the crypto ecosystem.
Bitcoin down 4.5%
Bitcoin stumbled over the last day as well. At the time of writing, the largest cryptocurrency by market cap was trading at $61,772.38 — a 4.5% decline in the past 24 hours.
It has also faced a 7-day drop of 9.5% and a 14-day decline of 7.2%, reflecting the bearish sentiment that has engulfed the broader crypto market. However, on a 30-day scale, the coin saw a modest gain of 6.7%, indicating that long-term holders may still find value in the asset.
With a trading range of $60,704.44 to $65,405.21 in the past day, Bitcoin’s market movements continue to influence the broader crypto market.
Its market cap still makes up more than half the value of the crypto market, underscoring its dominance and the significant trading volumes that keep it at the forefront of the digital asset landscape.
Aave (AAVE) has surged by 64.7% in less than a month. With such a strong rally, the question now is whether AAVE can continue its upward momentum or if it faces a potential pullback. In this week’s analysis, we examine the key technical indicators, resistance levels, and strategic considerations to determine the most likely direction for AAVE in the coming days.
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Resistance and support analysis
Aave (AAVE) faces a critical juncture as it approaches a very strong resistance level at $115. This level has a significant history, having acted as resistance 20 times and support 24 times in the past. The price currently hovers around this key level, and the market is closely watching to see if Aave (AAVE) will once again encounter resistance for the 21st and 22nd times or finally break through. However, signs suggest that it may be difficult to overcome this barrier.
When examining historical support levels, two key areas stand out: the $80 mark and the $50 mark. While the $50 level served as support during the bear market, it seems unlikely that Aave (AAVE) will revisit this area in the current market conditions. On the other hand, the $80 level is a more recent occurrence and represents a support level worth keeping in mind as Aave’s (AAVE) price action unfolds.
Fibonacci retracements analysis
Looking at the macro Fibonacci retracement from the low in August 2019 to the high in May 2021, we observe a significant 78.6% retracement level at $143.09. The last time Aave (AAVE) approached this level was in March 2024, when it ultimately failed to break through. Should Aave (AAVE) succeed in surpassing its historical resistance at $115, the next logical profit target would likely be set at this $143.09 level.
On a more positive note, when examining the Fibonacci retracement from the March 2024 high to the April 2024 low, Aave (AAVE) successfully breached the 23.6%, 38.2%, and 50% levels. It is now approaching the golden pocket, which lies between $121.50 and $124.11. If Aave (AAVE) manages to break above the $115 resistance, this golden pocket represents the next key area to watch. It is a strong, bullish zone with minimal resistance, making it a likely target for further upward movement.
Lastly, when applying Fibonacci from the early July low to the present, we identify two potential levels where Aave (AAVE) might retrace if it fails to break through the $115 resistance. The first is the 23.6% level at $106.50, and the second is the 38.2% level at $99.77, which aligns closely with the psychological $100 mark.
Technical indicators
Bollinger Bands
Aave’s (AAVE) recent price action has moved it above the upper Bollinger Band, indicating an overextension in the current uptrend. While trading above the middle band typically signifies a strong upward trend, the price being above the upper band often suggests that the asset is overbought. This positioning implies that the upper band is likely acting as a resistance level, making sustained movement at this level improbable. Given this, it is likely that Aave (AAVE) may experience a correction soon as the price reverts to a more sustainable level within the bands.
MACD
The Moving Average Convergence Divergence (MACD) histogram continues to grow and remains in the green, which signals increasing bullish momentum. The recent bullish crossover, where the MACD line has crossed above the signal line, also strengthens the case for continued upward movement in the near term.
RSI
On the other hand, the Relative Strength Index (RSI) is approaching the overbought territory, hovering near the 70 level. Historically, when Aave’s (AAVE) RSI has reached around 70, the bullish momentum has often stalled and led to a pullback.
Strategic considerations
First, it’s important to consider the seasonal patterns within the cryptocurrency market. Historically, August and September have been challenging months for crypto assets. According to data from CoinGlass, the median Bitcoin monthly returns during these months are among the worst in the calendar year. Therefore, expecting significant upward momentum in Aave (AAVE) during this period may be overly optimistic.
Secondly, when evaluating Aave’s (AAVE) current situation using the technical indicators discussed, it becomes apparent that the bullish momentum is not as strong as it might initially appear. The recent breakthroughs in Fibonacci retracement levels and the bullish signals from the MACD are the only indicators suggesting potential upward movement. However, everything else points towards a likely correction.
Moreover, while Aave (AAVE) has benefited from positive news and increased whale activity, these factors seem to be losing steam.
The net flow of Aave (AAVE) into exchanges has risen, which indicates potential selling pressure. For instance, on August 1, the net flow into exchanges exceeded $8 million.
Considering these factors, several price targets emerge if Aave (AAVE) fails to break above $115:
First target: $106.50
Second target: $100
Third target: $95
Fourth target (worst-case scenario): The golden pocket is between $87.41 and $88.89, which closely aligns with the $90 level.
If Aave (AAVE) does manage to break above $115, the outlook will shift toward a bullish scenario. In such a case, traders should watch for a subsequent retest of the $115 level as new support. Successfully holding this level would confirm the breakout and reinforce the momentum. Profit targets should then be adjusted upwards, focusing on the golden pocket between $121.50 and $124.11, followed by $135.20, and ultimately $143.09.
LayerZero price suffered a harsh reversal on Friday, erasing all gains made on Thursday after its airdrop.
LayerZero plunged to , down from this week’s high of .57. As it dropped, the token’s market cap fell below the billion mark at 5 million.
LayerZero price chart
LayerZero’s price, which we predicted, happened as the crypto industry went through a major sell-off with most tokens falling by double digits. Bitcoin dropped below the key support of ,000 while the market cap of all tokens fell to .33 trillion.
It also dropped as LayerZero’s users blasted its proof-of-donation mechanism during its airdrop. All token claimants had to donate .1 to the Protocol Guild to claim tokens, a novel approach to airdrops.
ZRO token also crashed as some users complained that they had not received their allocations. In a statement, the developers noted that they had launched a platform to appeal and correct their allocations.
Further, this decline happened as some ZRO recipients liquidated their positions. As we reported recently, most of the zkSync recipients dumped their tokens after the airdrop.
Still, as we wrote on Thursday, ZRO’s performance was in line with how most tokens trade after their airdrop. For example, Sei rose to .2128 shortly after its airdrop, dropped to a record low of .09, and then eventually rallied to .04.
Similarly, Sui initially rose to .4 then tumbled to .3, and then jumped to an all-time high of .10 within less than a year.
Therefore, some traders who have suffered heavy losses maintained that they will hold their tokens and wait for a recovery.
Don’t want to make the same mistake with $ZRO as I did with $W, but < B FDV seems cheap if/when the market gets hot again
Difference with $W is I was adding from b to b hoping for the “airdrop fractal” pump
LayerZero’s price rebound will depend on how the crypto market performs in the next few weeks. It will likely continue falling if Bitcoin maintains its bearish trend and crosses ,527, its lowest point in May.
Altcoins tend to have a close correlation with Bitcoin. For example, most altcoins soared to their multi-year or all-time highs as Bitcoin hit its record high in March. They then retreated as Bitcoin lost momentum.
