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Why is Crypto Down Today? Why is Crypto Crashing and Will it Recover?

Why is Crypto Down Today? Why is Crypto Crashing and Will it Recover?

99bitcoins99bitcoins2024/09/02 12:22
By:Dalmas NgetichSam Cooling

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Why is crypto down today? Why is crypto crashing, and will it recover? Find out the latest on Bitcoin and Ethereum in this crisis guidebook.

Crypto holders and traders expecting a moonshot endured a rough week. After the slump of August 27, prices have been moving sideways and mostly bearish.

Bitcoin, Ethereum, and top altcoins are yet to reclaim key liquidation levels.

At spot rates, Bitcoin is trading below $60,000, while Ethereum bulls failed to breach $2,800 despite confidence in increasing inflows via spot ETFs .

When writing, the total crypto market cap is stable, shedding roughly 2%, pushing valuation to over $2.11 trillion.

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Though optimism is high, traders can’t help but ask themselves why the market is depressed.

But, why is crypto crashing and will it recover?

There are multiple factors behind the current market trend.

Considering the volatile nature of crypto assets, technical and sentimental factors are behind this.

However, most of them lie in fundamental developments.  If Bitcoin prices race higher, altcoins, including Ethereum, will likely follow.

DISCOVER: How Do You Know When Crypto Prices are Going to Rise?

Why is Crypto Crashing and Will it Recover?

Technically, what’s needed is for Bitcoin to absorb selling pressure and stay above $56,500. This level marks June and July lows. Bitcoin could drift lower if broken, even retesting August lows of $49,000.

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Conversely, a break above $63,000 and a July high can set the base for another leg up to $72,000 and all-time highs.

Amid this uncertainty and the need to manage risk, most users allocate a big part of their crypto portfolio to Bitcoin and stablecoins.

Over the past few weeks, BTC’s market share has been rising, which indicates that there is pressure on altcoins.

On-chain analysts, citing CryptoQuant, note that the Puell Multiple index, used to gauge market sentiment, is in the “Decision Zone.”

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A drop below 0.6 could signal undervaluation and possible loading opportunities. If it rises above 0.8, it will start another bull run.

Ethereum Gains Capped At $2,800

Looking at Ethereum, it remains under pressure. If ETH rallies, it could also lift Solana and its ecosystem, which is comprised of meme coins.

Technically, sellers are in control–and it could get worse. CryptoQuant data indicates that ETH reserves on exchanges are increasing after a decline in the past few months.

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With more holders sending coins to Binance, Coinbase, and other platforms, it suggests they are willing to sell–a net bearish development.

Apart from ETH exchange flows, the network value to transaction ratio (NVT) shows that the coin could be overvalued. Yesterday, the NVT ratio spiked to overvalued territory, signaling possible weakness.

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Technically, unless there is a conclusive close above $2,800, and ideally, $3,500, ETH will be under pressure.

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A high-volume drop below $2,100 could trigger a sell-off toward $1,800 and $1,500 in the coming sessions.

EXPLORE:  16+ Potential Upcoming Binance Listings in 2024

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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