Bitcoin’s latest sharp drop has once again left crypto markets reeling, with the flagship cryptocurrency shedding $4,000 in just a few hours. This unexpected dip from over $62,000 to a low of $58,000 on Tuesday, Aug. 27, has analysts and investors scratching their heads.
As per Coinglass data, nearly 88,000 traders faced significant losses, with total liquidations reaching $320 million over the past 24 hours.
Although Bitcoin has slightly rebounded, trading at around $59,600 at the time of writing, the broader crypto market remains under pressure. This recent downturn has brought Bitcoin back to a key support level, last touched on Aug. 19.
Total #crypto market cap is down 7% to $2.17T today, as #Bitcoin fell below the $60K level 🔴 pic.twitter.com/AHifMHOvA0
— CoinGecko (@coingecko) August 28, 2024
A Pattern of Consolidation?
Benjamin Cowen, founder of ITC Crypto, pointed out that Bitcoin has once again failed to break above its bull market support band.
“If this follows the pattern of the previous cycle, we might not see a significant trend reversal until after interest rate cuts,” Cowen suggested.
On-chain analyst James Check echoed this sentiment in a blog post on Aug. 27, drawing parallels between the current market situation and 2019.
“The 2024 consolidation bears an eerie resemblance to what we saw in 2019,” Check noted.
Back in 2019, Bitcoin experienced a three-month surge from $4,000 to $13,000, followed by over a year of sideways trading. The three-month rally in early 2024, where Bitcoin rose from $40,000 to $74,000, could lead to a similar extended period of consolidation.
ETF Experts Express Confusion
The sell-off has left ETF experts puzzled. Nate Geraci, president of the ETF Store, expressed his surprise at the market’s reaction.
“Bitcoin fearmongers might be even more dramatic than those in the stock market,” Geraci remarked, noting that despite the recent dip, Bitcoin is still up 40% year to date, outperforming the S&P 500 by a significant margin.
Eric Balchunas, a Bloomberg ETF analyst, was similarly bewildered by the selling pressure.
“If ETFs have purchased $18 billion worth of Bitcoin, almost matching Satoshi’s stash, who exactly is selling?” Balchunas asked.
Altcoins Also Hit Hard
Ethereum wasn’t spared in the sell-off, dropping more than 10% from $2,700 to $2,400 before recovering slightly to $2,472 in Wednesday morning’s Asian trading session.
Other altcoins also suffered, with Solana (SOL), Avalanche (AVAX), Near Protocol (NEAR), and Uniswap (UNI) among the biggest losers.
However, not everyone is bearish. Crypto trader Luke Martin saw the drop as a potential buying opportunity, stating that altcoins might be at a “sell your house to buy more” level. He added, “The last time Bitcoin was at this level was four years ago in the summer of 2020, right before it surged from $10k to $60k over the next six months.”
Altcoins currently at the “sell your house to buy more” level.
Last time $BTC was at this level was exactly 4 years ago in the summer of 2020 when price went vertical from 10k to 60k over the next 6 months.
h/t @CryptoKoryo pic.twitter.com/vwaGkGE1FA
— Luke Martin (@VentureCoinist) August 27, 2024
