The cryptocurrency markets are currently experiencing a phase of muted volatility, with Bitcoin (BTC) trading sideways. This calm, however, may be short-lived, as many expect a potential resurgence for BTC and altcoins in the coming weeks.
Why is Bitcoin Price Down?
Several factors have contributed to Bitcoin’s recent decline:
1. Recession Fears: Ongoing concerns about a potential recession due to uncertain macroeconomic conditions.
2. Geopolitical Tensions: The conflict between Palestine and Israel has added to global uncertainty.
3. US Government BTC Sales: The selling of Bitcoin by the U.S. government has put additional pressure on the market.
4. Political Uncertainty: A drop in Donald Trump’s odds against Kamala Harris in the 2024 U.S. presidential elections has also affected market sentiment.
As of August 19, Bitcoin has slid 1.62%, currently trading at $58,355. Despite the bearish start to the week, investors might see a relief bounce as Bitcoin remains above the previous week’s Value Area Low (pwVAL) of $57,958. The pioneer cryptocurrency could potentially tag the previous week’s Point of Control (POC) at $59,384, with a possible climb of nearly 2% to a local top around $59,600. In a more optimistic scenario, BTC might even retest the $60,000 psychological level.
Matrixport’s Insights and Korean Influence
Crypto services firm Matrixport has shared insights, suggesting a potential comeback for Bitcoin in the next few weeks. Their analysis highlights the correlation between BTC’s funding rate and trading volumes in Korea, a significant player in the crypto markets. Matrixport noted that Korean trading volumes have dipped below the $1 billion mark for three consecutive days, which could lead to a further decline in the funding rate.
However, the upcoming Korean Blockchain Week, scheduled for the first week of September, could be a catalyst for reviving the market and boosting trading activity.
Crypto Market Prepares for a Bounce
Data from Santiment reveals a significant spike in stablecoin deposits on August 5, when Bitcoin’s price dropped to $48,914. This indicates that investors are preparing to buy the dip. Additionally, the supply of Tether (USDT) on exchanges has increased from 15.68 billion to 16.72 billion over the past week, signaling that investors are ready to scoop up BTC and other altcoins if the market sees further declines.
