Bitcoin Faces Volatility but Shows Signs of Recovery

Bitcoin Faces Volatility But Shows Signs of Recovery

Bitcoin had a bumpy start to August, falling more than 14% due to various macroeconomic issues, including Japan’s interest rate hike, worsening US employment data, and geopolitical tensions in the Middle East. Its drop below $50,000 on August 5 led to significant liquidations, wiping out more than $500 billion from the crypto market.

But Bitcoin has since recovered, finding support around $54,000 before reclaiming $56,000 and gaining 2.5% in the past 24 hours. This recovery has sparked optimism among analysts who predict further gains.

Kaiko analysts have observed a positive trend on US crypto exchanges like Coinbase, Gemini, and Kraken, where cumulative volume delta (CVD) showed that buying volume exceeded selling volume. Offshore exchanges like Binance and OKX saw strong sell-offs, while positive CVD on US platforms suggested that some investors were taking the opportunity to buy during the dip. The recent drop below $50,000 marks a 23.7% drop since Bitcoin’s opening on April 20, when the halving event took place.

Veteran investor Peter Brandt compared this correction to the 2015-2017 cycle and predicted the potential for a “new bull cycle top” in the coming weeks if history repeats itself. The Titan of Crypto believes Bitcoin is in the “final capitulation” phase after the recent flash crash, with projections showing a potential rally beyond $90,000.

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