It’s been an interesting week in crypto, to put it mildly.
Just four days ago, when Bitcoin was hovering around $62K, we hinted in our analysis that August tends to be Bitcoin’s least favorite month.
Little did we know that a domino effect of macroeconomic events would soon trigger a market plunge that far exceeded our wildest predictions.
But here’s the thing about crypto – it’s like that friend who always bounces back after a rough night out. Before we could even finish our panic-induced Twitter scrolling, most coins were already posting double-digit gains.
And while the rest of us were busy watching our portfolios do the slide, some big players were accumulating behind the scenes.
So, let’s discuss these events in detail and all the other big stories that happened in crypto in the past 24 hours. Here is a quick rundown of the top headlines we’re gonna cover:
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Bitcoin bounced back above $56K after a brief dip below $50K. Can it keep climbing, or is this just a tease? 📈
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Bitcoin’s “permanent holders” quietly scooped up $22.8 billion worth of BTC. Any bullish signals emerging in the market that we missed? 🤔
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Ethereum took us on a wild ride from $2,188 to $2,500 in 36 hours. But are the perp markets bullish on ETH? Or should we be cautious? 🎢
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The SOL/ETH ratio hitting an all-time high. Historically, what events followed such a surge in the ratio? 🚀
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Michael Saylor’s comparing Bitcoin to the Louisiana Purchase. So is he backing his statements with evidence or just making wild predictions out of thin air? 💭
And as always, a quick market analysis at the end!
Let’s dive in!
Only Up From Here?
Bitcoin’s had a rough start to August, but things might be looking up.
After dropping below $50,000 and causing over $500 billion market wipeout, Bitcoin is now back up to $56,000.
But here’s something interesting: U.S. exchanges like Coinbase and Gemini are seeing more buying than selling. Seems like some American traders might be seeing this dip as a chance to buy in.
Peter Brandt, a trader, thinks this looks a lot like what happened in 2015-2017.
What do historical patterns suggest in terms of future price movements? Read the full story!
Bitcoin’s Silent Surge
Talking about volatility, right when the market was panicking and the CMC Fear and Greed Index was hitting the “Fear” mode (just 10 points above the Extreme Fear zone), Bitcoin’s “permanent holder addresses” were quietly amassing wealth.
Over the past month, these addresses have accumulated a staggering $22.8 billion worth of Bitcoin, equivalent to 404,448 BTC.
CryptoQuant’s CEO, Ki Young Ju, believes this trend could signal major announcements incoming from TradFi giants or even governments regarding Bitcoin purchases in Q3 2024.
He thinks retail investors might regret not buying now due to concerns over macroeconomic factors.
And he pointed out some major bullish signals emerging. Read the full story!
And Something About Ethereum…
It was definitely an interesting quarter for Ethereum. After the ETF approval, we all thought we would see its price make big moves, but then the volatility struck the entire market.
Its price dropped about 33.9% to $2,188 overall, its lowest point in over seven months.
But it then bounced back 23.7% in less than 36 hours.
So, what caused this crypto chaos? Blame it on Japan.
The Nikkei 225 took a dive after the Bank of Japan hiked interest rates for the first time in 17 years. This shook the global markets, hitting the S&P 500 and even gold.
Ethereum got hit hard because, well, crypto is crypto – it’s volatile.
Plus, a lot of ETH bulls were using high leverage. But that same volatility helped it bounce back to $2,500 pretty quickly.
What about the perp markets? Are they bullish on ETH now? Or should we be cautious? Read the full story!
But Wait, the SOL/ETH Ratio Just Peaked
Talking about ETH, the crypto market just witnessed a significant event: the SOL/ETH ratio hit a new all-time high of 0.0595.
This milestone comes after an odd week that saw over $500 billion wiped from the crypto market.
Amid the chaos, Ether dipped 22% on August 5, while Solana experienced an even sharper 36% drop.
However, Solana’s rebound has been impressive.
SOL bounced back 35%. In contrast, Ether’s recovery was more modest. This discrepancy in recovery rates is what’s driven the SOL/ETH ratio to its new peak.
But historically, what events followed such a surge in the ratio? Read the full story!
Michael Saylor’s Big Bitcoin Idea: A Modern-Day Louisiana Purchase?
Michael Saylor just compared a potential U.S. Bitcoin reserve to the Louisiana Purchase.
Saylor’s drawing parallels to Thomas Jefferson’s 1803 Louisiana Purchase, which basically doubled the size of the U.S. He’s saying Bitcoin is scarce and desirable, just like that land was back then.
Even at the Bitcoin 2024 conference, Saylor was in full hype mode. He talked about Bitcoin hitting $13 million per coin by 2045.
So is he backing his statements with evidence or just making wild predictions out of thin air? Read the full story!
And a Quick Market Analysis…
After a sharp sell-off that saw Bitcoin dip to $49,500 and Ethereum to $2,100, we’re now seeing a significant bounce back.
But what’s really going on beneath the surface?
This recent volatility stems from a perfect storm of global economic factors. As most of you know now, The Bank of Japan’s surprise interest rate hike triggered a massive unwinding of the yen carry trade, shaking the global markets.
We saw similar ripple effects back in March 2023 when the collapse of Silicon Valley Bank rattled the financial sector.
Crypto wasn’t immune to the fallout. The total market cap took a 26% hit before rebounding.
Interestingly, the $49,500-$50,000 range proved to be a massive support zone for Bitcoin, with the price bouncing back twice from this level. This kind of price action often indicates strong buyer interest at these levels. (NFA)
Looking at on-chain data, we’re seeing some fascinating patterns.
Bitcoin held on exchanges has hit the yearly low.
Source: Coinglass
This often indicates a bullish sentiment among retail investors and deeper institutional holdings.
But it’s not all smooth sailing.
The unwinding of Jump Trading’s crypto portfolio, following their CFTC probe, has added to the selling pressure.
So, where does this leave us?
The market has shown remarkable resilience in the face of global economic issues. The quick recovery suggests strong underlying demand, particularly from institutional players.
However, we’re not out of the woods yet. Keep an eye on global economic indicators, regulatory developments, and on-chain metrics for clues about where we might be headed next.
Also, monitor whale holdings to see if the big players are accumulating Bitcoins or selling their holdings. You can track this data here.
And that’s a wrap. See you tomorrow with more market updates!
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