Last night, the cryptocurrency market once again experienced a plunge, with Bitcoin briefly dropping to around $112,000, and Ethereum also falling below the $3,400 mark! In the past 24 hours, the number of global liquidations reached 164,637, with liquidation amounts exceeding $716 million, mainly affecting long positions that were badly liquidated. The shorts that took profits early yesterday missed out on a larger decline, causing regret; meanwhile, the longs are still struggling in the 'locked zone'. If the market further explores the bottom, there may be an opportunity to pick up some 'bloodied cheap chips'.
Bitcoin
From a daily chart perspective, Bitcoin is overall in a downtrend, having closed with six consecutive red candles. The current price has fallen below the 30-day moving average (MA30), with the candlestick appearing suspended and lacking support. If a rebound cannot effectively return above $116,000 in the short term, i.e., back above MA30, there is a high probability it will continue to pull back and test the 60-day moving average (MA60) support, which is currently around $111,000. It is expected that in the coming week, Bitcoin will mainly fluctuate in the range of $111,000 to $116,000 for adjustment.
The current key support level for Bitcoin is at $112,096, which is not only the starting point for this round of increase but also corresponds to an important support area on the daily chart (see the yellow box on the right side of the chart). If this level is lost and cannot be quickly reclaimed, it may trigger further declines.
From a 4-hour perspective, $113,255 has been broken, with short-term support levels to watch at $112,065 and $110,462. If $112,065 is lost and cannot be quickly reclaimed, the overall trend will clearly turn weak.
The resistance levels above are: 114,037, 114,653, 115,920;
Key support levels below to watch: 113,115, 112,065, 110,462.
Ethereum
Currently, ETH has become the main driving force behind the market's decline, with the 4-hour level still not stopping the decline, and the daily downtrend has just started. In this situation, even if Bitcoin itself has strong support, it is difficult to remain unaffected, and it is expected to continue to be dragged down by ETH.
In the short term (at least for the next two days), it is not recommended to consider going long. If ETH rebounds, it may be an opportunity to short at a high. At the same time, continue to monitor the ETH/BTC exchange rate adjustment rhythm, which may provide more signals for the overall market direction.
ETH: The price directly broke below $3,500 to a low of $3,428, indicating that the main force has given up defending this level. Next, watch the $3,380 support, which forms a short-term fluctuation band with $3,440, and if the price drops to this area, it is expected to slow the downward pace.
If we consider $2,474 as the starting point for the previous major rise, $3,380 is exactly the 0.382 retracement level. Currently, if the price rebounds to around $3,520 (it has slightly touched $3,537 earlier), consider shorting again, aiming for $3,380-$3,336. Set a stop loss around $3,588, which is the strong resistance for today. If it subsequently drops to the target, it is not recommended to chase the short; wait for new opportunities to re-enter.
Reasons for the plunge - Non-farm payroll correction data
The previously released positive data was suddenly violently corrected by the officials. Non-farm payrolls are an important indicator of the job market and one of the two key factors for the Fed's interest rate decisions, but the non-farm payrolls for May and June were revised down from 291,000 to 31,000, directly collapsing the entire market; financial reports did not help. Comparable to a project party announcing it would buy back $10 million to pump the price, only to tell you it would release $500.
Altcoin
Altcoins cannot be bottomed out completely; they gain volume during declines and lack strength during rises, a typical case of 'boiling frogs in warm water'. The 4-hour chart shows almost a full decline, and the overall trend is weak. Currently, the only positives supporting the altcoin market are two points: potential interest rate cut expectations and some progress on altcoin ETFs.
(1) Interest Rate Cuts
However, under the constant tug-of-war between Trump and Powell, and with interest rate cuts widely mentioned and continuously delayed, Sponge believes that even if there are interest rate cuts in the future, the effects may not be significant after the first cut, and there may even be a decline following the good news.
(2) Altcoin ETFs, and Ethereum's staking approval
Although these are currently all positive news, I believe that the second piece of good news (such as altcoin ETFs) has a more direct uplifting effect on Ethereum and altcoins. It was previously anticipated that altcoins would enter an adjustment phase during Bitcoin's consolidation period after reaching a peak, and now that Bitcoin has experienced a nearly 10,000 point pullback, this judgment has been confirmed.
Next, as Bitcoin enters a sideways or weak rebound phase, altcoins may face a point of differentiation and selection. If Bitcoin no longer plunges deeply and maintains a certain range of fluctuations, then some altcoins may experience a certain degree of rebound.
For investors who have already cleared their positions or are holding light positions, this can be seen as an initial observation range for building positions, but whether it is worth adding still depends on whether Bitcoin and Ethereum set new lows next.
