The cryptocurrency market is deep in the red, and just as prices are sliding, Eric Trump returns with optimistic tweets. Here are the factors driving the downturn and what analysts predict next.

The cryptocurrency market has dropped over 5% in the past day and is currently at a market capitalization of $3.7 trillion. Bitcoin remains steady at $113,000, while altcoins are taking the biggest hit with Ethereum, XRP, Cardano, and Solana down by as much as 3%.

But this is exactly why it could be an opportunity…

Eric Trump Causes Another Nonsensical Conversation

Amid the market decline, Eric Trump tweeted: '₿uy the dips!!! $BTC $ETH.' Many in the cryptocurrency community noted that each time he shares this message, prices tend to drop further before recovering.

Investor Ted Pillows also believes that the current dip might hit bottom on Monday. After that, he expects the market to recover and continue to rise.

Bitcoin Nearing Buying Zone, About to Rise?

Analyst Michaël van de Poppe views the current dip as an opportunity to accumulate. He predicts that August will be a consolidation month before Bitcoin and altcoins recover.

Analysts recently shared that Bitcoin is entering a crucial buying zone and doubt that the price will drop significantly below $108,000. He emphasized that $114,700 and $116,800 are important resistance levels. Once these levels are broken, possibly by the end of August or early September, he predicts a strong price increase.

Bitcoin Slips to $113,000 Amid Geopolitical Tensions

Bitcoin fell below $115,000 on Friday, hitting a multi-week low of $113,164 due to escalating political tensions. Currently, Bitcoin is trading at $113,750, down 1.5%.

Weak U.S. employment data and increasing macroeconomic instability continue to put additional pressure on the cryptocurrency market. Notably, Bitcoin ETF funds saw a net inflow of $115 million on Thursday, ending a five-day streak of inflows. On August 1, Bitcoin experienced an outflow of $812 million.

Short-Term Holders Drive Bitcoin Selloff

According to data from Glassnode, over 90% of Bitcoin supply has been profitable for over a month, a sign that most holders are enjoying profits. While this reflects strong market performance, it also increases the risk of profit-taking.

Glassnode also notes that the recent selloff was primarily driven by short-term holders, accounting for 85.5% of the Bitcoin volume spent in the past 24 hours. This indicates that new investors, rather than long-term holders, are behind the current wave of selling.

Analysts note that August is typically a slow month for cryptocurrencies, and there are no clear signs that the bull run has ended. Many expect the market to regain momentum in October, suggesting that Eric Trump's call may not be far-fetched.

Although the timing is still uncertain, we may see potential recovery in the coming weeks.