The cryptocurrency market is experiencing a sharp decline, and with falling prices, Eric Trump returned with an optimistic tweet. Here’s what is driving this downturn and what analysts expect for the future.
The cryptocurrency market has dropped over 5% in the past day, and its market capitalization now stands at $3.7 trillion. Bitcoin's price remains steady at $113,000, while altcoins have taken a bigger hit, with Ethereum, Ripple, Cardano, and Solana dropping by up to 3%.
But why could this be an opportunity?
Eric Trump stirs ridiculous controversy again
In the midst of the market decline, Eric Trump tweeted: "Buy the dips!!! $BTC $ETH". Many in the cryptocurrency community noted that every time he posted this message, prices tended to dip further before recovering.
Investor Ted Bilous also believes that the current decline is likely to hit its lows on Monday, after which he expects the market to recover and continue its upward movement.
Bitcoin near the buying zone, is the price coming?
Analyst Michael van de Poppe sees the current decline as an accumulation opportunity. He expects August to be a month of consolidation before Bitcoin and altcoins recover.
An analyst recently pointed out that Bitcoin has entered a key buying zone, anticipating a sharp drop below $108,000. He noted that $114,700 and $116,800 represent key resistance levels. Once these levels are broken, which could happen in late August or early September, a sharp rise is expected.
Bitcoin price drops to $113,000 amid geopolitical tensions
Bitcoin price fell below $115,000 on Friday, reaching a multi-week low of $113,164, as political tensions escalated. Bitcoin is currently trading at $113,750, down 1.5%.
Weak U.S. jobs data and increasing macroeconomic uncertainty continue to cast a shadow over the cryptocurrency market. Notably, Bitcoin exchange-traded funds saw a net inflow of $115 million on Thursday, ending a five-day streak of outflows. On August 1st, Bitcoin experienced an outflow of $812 million.
Short-term investors fuel Bitcoin sell-offs
According to Glassnode data, over 90% of Bitcoin supply has been profitable for over a month, indicating that most holders are making gains. While this reflects strong market performance, it also increases the risk of profit-taking.
Glassnode also noted that the recent sell-off was largely driven by short-term investors, who accounted for 85.5% of Bitcoin trading volume over the past 24 hours. This suggests that new investors, not long-term holders, are behind the current sell-off.
Analysts point out that August is typically a slow month in the cryptocurrency market, with no clear signs of the uptrend ending. Many expect the market to regain momentum in October, suggesting that Eric Trump's call may not be out of reach.
While the timing remains uncertain, we may see a potential recovery in the coming weeks.