Bitcoin and Ethereum Prices Drop: Expert Predicts When the Decline Will End
The recent turmoil in global markets has had a significant impact on the crypto sector, leading to a sharp decline in prices. In the past 24 hours, there has been a substantial drop in global stocks, increased volatility, and a shift towards safer investments like bonds. Notably, Ethereum experienced a 23% plunge to approximately $2,250, while Bitcoin saw a 16% crash to around $51,000, briefly dipping below $50,000 for the first time since February before recovering.
The overall crypto market value has decreased by about 16%, falling below $1.9 trillion, as reported by CoinGecko. Experts attribute this downturn to the broader macroeconomic instability affecting regions such as the US, Middle East, and Asia. This economic uncertainty has led to a pessimistic outlook in traditional markets, with fears of a potential recession looming.
The recent surge in the US unemployment rate, reaching a nearly three-year high, coupled with the US Federal Reserve’s hint at a rate cut in September, has further fueled market concerns. Tom Cohen, a head trader at Algoz Technologies, emphasized how these factors, combined with weak economic indicators, have contributed to the current market distress.
Moreover, escalating political tensions in the Middle East and the Bank of Japan’s decision to raise interest rates to bolster the yen have added to the market unease. Tokyo’s stock exchange witnessed its most substantial single-day decline since its inception, reflecting the widespread uncertainty in global markets.
The weekend trading environment has exacerbated the market sell-off due to reduced liquidity and limited institutional activity. August historically tends to be a challenging month for Bitcoin and Ethereum, according to Cohen, further adding to the current market pressures.
Despite the current downturn, Eugene Cheung, head of institutions at Bybit, remains optimistic about the future of Bitcoin and Ethereum. He highlighted the robust fundamentals of both cryptocurrencies, citing increased institutional adoption and positive regulatory developments as key drivers for potential price appreciation in the latter half of 2024.
Cheung pointed out that factors such as anticipated US rate cuts, rising national debt, and growing political support for crypto could pave the way for significant price gains. He expressed confidence in Bitcoin’s potential to break out of its current range and reach price targets of $86,000 or even $105,000.
In terms of recent market movements, Bitcoin has declined by 16% to trade at $51,048, while Ethereum has dropped by 23% to trade at $2,252. Despite the current challenges, industry experts remain hopeful about the long-term prospects of cryptocurrencies, highlighting ongoing developments and institutional support as positive indicators for future growth.
