A challenging financial landscape
The global financial situation is unfavorable for cryptocurrencies. Markets are experiencing a drain in liquidity, partly due to the actions of the U.S. and its Federal Reserve. Despite recent legal victories for crypto companies against the SEC, the crypto industry could benefit from a more relaxed monetary policy.
The state of Bitcoin
Bitcoin has been moving sideways since mid-August, displaying a pattern reminiscent of a heart monitor with ups and downs. It experienced a spike on the Grayscale news but quickly retraced. Despite this turbulence, Bitcoin appears to be holding steady, although a potential next move could be a drop to the strong support level at $24,300, where the 50-week moving average also offers support. Institutions may be waiting for a spot ETF, so a decline before the potential ETF approval in October could be favorable.
The situation with Ethereum
Ethereum has been losing ground against its ETH/BTC pairing, but it continues to follow an upward trend since January 2020. A bounce could be on the horizon as it returns to this trendline. In terms of its dollar pair, Ethereum looks bullish despite a 22% loss over the past 10 weeks. It is currently within an ascending triangle pattern, which has been in place since May 2022. Although this pattern may persist until June 2024, a breakout could occur earlier. The Stochastic RSI indicator suggests potential upside gains, as previous RSI bottoms have led to such movements.
The plight of Solana
Altcoins have suffered more than Bitcoin and Ethereum, and Solana, a major competitor to Ethereum, has been hit hard in recent weeks. Its value has decreased by nearly 50% since an early June rally peak. The next significant support level can be found at $14.
Cardano’s struggles
Cardano, another top layer 1 cryptocurrency, has experienced a slower decline than Solana but has now reached a critical support level of $0.24, representing a loss of almost 46% since the last rally high. If this support level doesn’t hold, it could drop to just under $0.16.
Hot Take: Altcoins Bear the Brunt of the Market Downturn
The crypto market has been tough for altcoins, with Bitcoin and Ethereum showing more resilience in the face of market downturns. While Bitcoin has maintained stability, Ethereum’s dollar pair looks promising, despite recent losses. However, Solana and Cardano have suffered significant declines, with Solana plummeting by almost 50% and Cardano facing critical support levels. As the global financial scene remains challenging, with liquidity being drained from markets, it’s crucial for cryptocurrencies to navigate these conditions and potentially benefit from a looser monetary policy. Investors should closely monitor these developments and consider factors like upcoming ETF approvals and support levels when making investment decisions.
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