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Crypto Market Sell-Off: Bitcoin, Ethereum, and Solana Drop as Technicals and Macro Factors Take Center Stage
Cryptocurrency prices experienced a sharp decline in the hours following the US market close on Tuesday. According to CoinMarketCap data, Bitcoin (BTC) fell by 6%, Ethereum (ETH) dropped by 9%, and Solana (SOL) declined by 7% over a 24-hour period.
The sudden sell-off began shortly after 5:00 PM Eastern Time.
Within the span of approximately one hour, Bitcoin plummeted from just under $62,000 to lows around $58,000.
BTC has since recovered to the $59,000 range.
Meanwhile, ETH dipped from the upper $2,500s to the mid-$2,400s. SOL fell from above $154 to its current level near $147.
Data from CoinGlass indicates that leveraged futures positions worth $205 million were liquidated in the past four hours.
This brings total liquidations to over $300 million in the last 24 hours, marking the highest level since August 4.
Did Technicals Trigger the Sudden Crypto Drop?
There was no obvious catalyst for the sudden drop in cryptocurrency prices.
However, technical factors likely played a role, particularly for Bitcoin.
Bitcoin’s sharp decline occurred after its price broke below its 50-day moving average (50DMA).
The 50DMA had served as a key resistance level for most of August.
It was then flipped into a support level during last Friday’s rally, which saw BTC reach highs of $65,000.
That support has now been lost, along with the uptrend established from the mid-month lows.
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Chart analysis suggests a near-term test of $56,000 is a possibility.
Where Do Crypto Prices Go From Here?
Tuesday’s sharp drop could prove short-lived if Wednesday’s Nvidia earnings report exceeds expectations.
If you pay attention to any report this week, it should be Nvidia (NVDA)’s earnings update tomorrow.
As a major supplier of tech that fuels AI, NVDA is a major indicator of how AI has been performing. Investors are expecting AI to boost all company earnings. If it disappoints,… pic.twitter.com/WkYUbltHAw— Sevens Report (@sevensreport) August 27, 2024
Nvidia, one of the world’s largest companies, is at the forefront of the AI boom.
Its strong earnings performance over the past 12 months has been a key driver of the US equity bull market.
This bull market has, unsurprisingly, spilled over into the correlated cryptocurrency sector.
Strong earnings tomorrow could provide a significant tailwind for major cryptocurrencies. Bitcoin may not remain below $60,000 for long.
US Core PCE inflation data, scheduled for release later in the week, could also bolster market sentiment.
This is because the data is expected to further reinforce the Federal Reserve’s confidence that a series of rate cuts in the coming quarters is appropriate.
This should support the recent dovish shift in the Fed’s language and guidance.
The Federal Reserve is the least hawkish they’ve been since starting to raise interest rates.
The Fed Communication Index is in virtual free fall, dropping from its most hawkish level in 20 years straight towards dovish territory.
Rate cuts are coming for real this time. pic.twitter.com/cEYk0q9yYd— ecoinometrics (@ecoinometrics) August 23, 2024
Easing liquidity conditions are expected to be another major tailwind for cryptocurrency prices in the years ahead.
The post Crypto Prices Dump: BTC -6%, ETH -8.5%, SOL -6.5% – What’s Going On? appeared first on Cryptonews.
