The slight decline in Bitcoin and Ethereum prices led to the liquidation of over 400 million USD in long positions, with the market on alert ahead of the Jackson Hole meeting.
The prolonged adjustment, with negative funding rate and an advantage for put options, shows that investors are cautious even though demand from organizations remains steady. BTC price continues to fluctuate in the range of 112,000-120,000 USD ahead of the Fed chairman's speech.
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BTC price dropped from 118,000 USD to 115,000 USD, ETH dropped from 4,500 USD to 4,300 USD, liquidating over 400 million USD in long positions.
Negative funding rates and dominant put options reflect a cautious market ahead of the Jackson Hole meeting.
Organizational demand remains strong, Metaplanet added 775 BTC, BTC price fluctuates in the range of 112,000-120,000 USD.
How do the price declines of BTC and ETH affect the cryptocurrency market?
The drop in BTC from 118,000 USD to 115,000 USD and ETH from 4,500 USD to 4,300 USD has led to the liquidation of over 400 million USD in long positions, according to QCP Capital's report. This is a continuation of the 5% adjustment trend from the previous week when liquidations in the DeFi sector exceeded 1 billion USD, reflecting widespread profit-taking.
Market experience shows that large liquidations often drive stronger volatility in the short term. Investors need to be cautious in risk management to minimize negative impacts.
Why has the funding rate turned negative and put options been prioritized?
Negative funding rates, along with the market's preference for put options, indicate a cautious sentiment and rising expectations for price declines ahead of the important Fed meeting at Jackson Hole. This is a signal that investors want to protect their portfolios from unforeseen fluctuations.
Technical analysis and market behavior both indicate that large investors are increasing risk hedging activities, preparing for potential fluctuations from monetary policy.
"Stronger-than-expected PPI data has increased uncertainty about Fed policy, causing the cryptocurrency market to struggle in a narrow price range for a while."
QCP Capital analysis expert, August 2023
What role does organizational demand play in the current market?
Despite price adjustments and increased risks, demand from organizations remains quite stable. For instance, Metaplanet added 775 BTC over the weekend, demonstrating the long-term accumulation trend of professional investors.
BTC price is being maintained in the range of 112,000-120,000 USD, indicating a balance between profit-taking pressure and organizational buying. The next developments will heavily depend on Fed chairman Powell's speech at the Jackson Hole meeting.
What impact does the Jackson Hole meeting of the Fed have on cryptocurrency prices?
The Jackson Hole meeting is seen as an important event that could guide short-term monetary policy. A 'hawkish' or ultra 'stable' statement could disrupt the current price range, directly affecting BTC and ETH price volatility.
The market is waiting for clear signals from Fed chairman Powell to determine the next direction. Meanwhile, the accumulation of organizations may also help stabilize the market before strong fluctuations.
Frequently asked questions
Is the decline in BTC and ETH prices a sign of a bear market?
The price drop and significant liquidations reflect profit-taking pressure and technical adjustments, but it is not certain that the market has turned bearish while organizational demand remains strong.
Why are negative funding rates important for cryptocurrency investors?
Negative funding rates indicate that the market trend leans towards short positions and increased risks, helping investors assess sentiment and manage risk.
Does organizational demand help cryptocurrency prices recover?
The accumulation by organizations, such as large BTC purchases, creates important support, contributing to balancing supply and demand and reducing price volatility.
How does the Jackson Hole meeting affect the cryptocurrency market?
Jackson Hole could change US monetary policy, thereby directly affecting cash flows and investor sentiment in the cryptocurrency market.
What should we do when the market shows many signs of instability like now?
Investors need to enhance risk management, update credible news, and consider diversifying their portfolios to minimize negative impacts.
Source: https://tintucbitcoin.com/bitcoin-giu-gia-112-000-120-000-usd-cho-powell/
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