Total crypto market sinks below $2T as analysts eye Bitcoin reversal below $54K
Bitcoin could be heading to a correction below $54,000 after the global crypto market capitalization fell below a key psychological level.
The global crypto market capitalization fell below the $2 trillion mark after decreasing 3.46% in the 24 hours leading up to 10 am UTC, Sept. 4, according to CoinMarketCap data .
Total Crypto market cap, 1-month chart. Source: CoinMarketCap
Combined with the growing sell-off in traditional markets, this resulted in Bitcoin ( BTC ) falling below the $60,000 psychological mark.
For a potential reversal, Bitcoin price first needs a correction to $54,000, according to Alex Kuptsikevich, senior market analyst at FxPro. The analyst told Cointelegraph:
“Bitcoin fell to $55.5K at the peak of the decline before stabilizing at $56.4K. Current levels acted as support during the May and July declines, but the trend of lower local lows sets up a reversal at $54K at the earliest.”
BTC/USD, 1-month chart. Source: Cointelegraph
Related: Polygon’s MATIC upgraded to POL, driving ‘hyperproductive’ token utility
Bitcoin could bottom below $50,000 on US interest rate cut: Bitfinex
September could bring a long-awaited interest rate cut in the US, the world’s largest economy, which is a positive signal for risk assets like Bitcoin.
However, Bitcoin’s bull run could precede a correction below $50,000 following the interest rate cut, according to Bitfinex analysts.
The analysts told Cointelegraph:
“If we were to speculate, we would caution to expect a 15 - 20 percent decline when rates are cut this month, with a bottom of $40k - 50k for BTC. This is not an arbitrary number but based on the fact that the cycle peak in terms of percentage return reduces by around 60 - 70 percent each cycle and the average bull market correction has reduced as well.”
However, Bitcoin could escape this significant correction if macroeconomic conditions further improve, noted the analysts.
Investors are increasingly expecting an interest rate cut from the United States Federal Reserve at its upcoming meeting on Sept. 18.
Odds of an interest rate cut. Source: CME FedWatch
According to the latest data from the CME FedWatch tool, the odds of a 25 basis-point rate cut currently stand at 59%, while the odds of a 50 basis-point rate cut are at 41%.
Related: August sees 215% rise in crypto phishing, $55M lost in single attack
Bitcoin ETFs record five consecutive days of negative outflows, signaling more volatility for September
September has historically been a month of downside volatility, with average Bitcoin returns at -4.69%, making it the most bearish month based on average returns, according to CoinGglass data.
Bitcoin monthly returns percentage. Source: CoinGlass
However, the slump in inflows from US spot Bitcoin exchange-traded funds (ETFs) is also adding downward pressure for the world’s first cryptocurrency.
The US ETFs saw five consecutive days of cumulative net outflows, recording over $287 million worth of outflows on Sept. 3, according to Farside Investors data .
Bitcoin ETF Flow (USD, million). Source: Farside Investors
ETFs could bolster Bitcoin price to new all-time highs once inflows turn positive. Spot ETFs accounted for about 75% of new investment in Bitcoin by Feb. 15 as it surpassed the $50,000 mark.
Why America Should Buy Bitcoin | RFK Jr. Interview. Source: YouTube
Magazine: Telegram CEO cannot leave France, OpenSea receives Wells notice, and more: Hodler’s Digest, Aug. 25 – 31
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Decentralized AI Gets a Boost as SingularityNET Partners with Mina Foundation
MVLUSDT now launched for futures trading and trading bots
Bitget has launched MVLUSDT for futures trading with a maximum leverage of 20, along with support for futures trading bots, on November 29, 2024 (UTC+8). Welcome to try futures trading via our official website (www.bitget.com) or Bitget APP. MVLUSDT-M perpetual futures: Parameters Details Listing t
Nansen: Pantera Capital increased its holdings of ENA by $8 million in the past 24 hours