The crypto market is in a downturn, prompting concerns about its future. However, amidst this uncertainty, there are signs that a turnaround might be on the horizon. Rekt Fencer, a top crypto analyst, has provided an analysis of the market situation and potential recovery indicators.
The perception in the crypto market lately mirrors that of June 19th, 2023, when prices were notably lower. On that day, the total market cap was $1.063 billion, with Bitcoin at $26,500, Ethereum at $1,700, and Solana at $15.4. Despite the stage of depression, there are reasons to believe this could be a bear trap.
What you'll learn 👉
Bitcoin’s Position and Future Prospects
Bitcoin’s larger picture remains positive despite losing its $58,000 support level. The low $50,000 level can still provide a cushion, and there’s no need for concern unless it fails to hold the low $40,000 level.
Notably, Bitcoin has already doubled since the approval of the ETF, even though altcoins are underperforming this cycle. Major investors are not selling Bitcoin; instead, they are buying more during the drop.
Marathon Digital Holdings, the largest miner, has not sold its assets despite needing to free up capital. Miner capitulation could signal an impending trend reversal, with analysts expecting Bitcoin to rise about four months after a halving event.
Bitcoin Dominance and Potential Altseason
Bitcoin’s market capitalization dominance has formed a consolidation zone between 54% and 57% since April. A decline and break below this zone could signal the start of an altseason.
Additionally, the approval of the Ethereum ETF, possibly delayed due to the July 4th holiday, could bring more attention to Ethereum and its ecosystem.
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Recent buyers are experiencing emotions as Bitcoin nears the $47,000 level, which is just 25% below the average purchase price for short-term holders. This level must hold or bounce quickly for a reversal.
However, even if $47,000 is reached, investors should exercise caution. Organic corrections in past bull markets have lasted 50 to 100 days, emphasizing the importance of patience.
Global liquidity is currently in consolidation, but changes are expected in Q4 2024 and Q1-Q2 2025. The key crypto-native liquidity, particularly stablecoins, is also showing a decline in demand for purchasing coins. This trend is evident from the rapidly dropping liquidity of USDT.
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Perspectives on the Bull Market
According to GCR, the market still resembles the summer of 2020. After the summer 2020 dip, many altcoins experienced growth over the next six months. If history repeats itself, this might be the last chance for investors to accumulate positions before a potential bull run.
Despite the dips lately, there are several upward indicators for the crypto market. Rekt advises to focus on building their positions, learning new skills, and developing strategies during this local dip. By the end of the cycle, those who remain patient and strategic will likely emerge as winners.
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