Price Analysis bitcoin (BTC) & ethereum (ETH)
BTC
Until 26 July, BTC was trading within a 5-month range. However, this most recent price movement has precipitated its fall below the lower range. While BTC had established a new support near $57,000 during the last shakeout in early July, this level has been breached under heightened selling pressure, with BTC retreating to as low as $49,600.
Following a marked recovery from sub-$50K levels, BTC is, as of writing, trading around $51,000 just before the US market opens. Market analysts speculate that the opening of the US weekly session might exacerbate the downturn, potentially pushing BTC to revisit lows near $47,000.
ETH
ETH's journey mirrors that of BTC, having broken its major support at $2900 and retracted to $2112 in the early hours of 5th August. Currently, ETH has found some solace within a $2100 to $2200 support range, with a significant plunge below this bracket appearing unlikely as the market has already adjusted to the prevailing negative sentiment. ETH is now trading around $2,260, marking a decrease of over 16% in the last 24 hours.
Despite the hopeful sentiment when ETH was approved for ETFs, climbing to $3,980 on the announcement day, it has struggled to maintain momentum above $3,600 since the ETF went live. The recent market turmoil has wiped out all the gains ETH had made since the year's start.
BTC and ETH Freefall: Should You Buy This Dip?
The present downturn presents an attractive opportunity for investors aiming for long-term gains from cryptocurrencies. The significant decline in prices for both BTC and ETH since Sunday evening suggests limited potential for further volatility just before the US market opens. Historically, market downturns like these have often been precursors to significant recoveries, offering substantial returns to those who invested during the lows.
If you're equipped with a long-term investment perspective and can navigate through the associated volatility, this might be an opportune moment to augment your cryptocurrency portfolio at a lower cost.
Conclusion
It's crucial to tread cautiously in the current volatile market environment, exacerbated by unpredictable geopolitical scenarios, such as the heightened tension between Israel and Iran. These situations make market movements less predictable, and there's a possibility of further declines in asset values. It's advisable to maintain a diversified portfolio and only invest what you can afford to lose. The market's response in the upcoming week will be crucial and closely observed by market participants.
