Crypto prices plunged as BTC, ETH, and SOL fell by 6%, 8.5% and 6.5% respectively, so what’s happening? Cryptocurrency prices have seen sharp declines over the past few hours after the US markets closed on Tuesday, with Bitcoin (Bitcoin-BTC) falling by 6%, Ethereum (Ethereum-ETH) by 9% and Solana (Solana-SOL) by 7% in the last 24 hours, according to CoinMarketCap.
The sell-off began at 5 pm EST, and within one hour the price of Bitcoin (BTC) fell just below the $62,000 level to touch $58,000, but recovered slightly after that to settle again above the $59,000 level, and the value of Ethereum (ETH) fell just below the $2,600 level to about $2,450, while the price of Solana (SOL) slipped from a level of more than $154 to settle at its current value around $147.
According to CoinGlass data, $205 million leveraged futures positions were liquidated in the past 4 hours alone, resulting in the total value of forcibly liquidated trades in the last 24 hours surpassing the $300 million mark, re-recording their highest values since August 4.
Did technical indicators cause sharp price declines?
Given the absence of a clear catalyst for cryptocurrency prices to fall so severely, technical indicators may have a role in them, at least for Bitcoin’s price movements.
The sharp drop in the BTC/USD pair came after the price fell below the 50-day moving average (DMA-50) line, which served as a key resistance for most of August and turned into an important support level after breaking last Friday, when the BTC price rose to $65,000.
Now that support has faded, and the extended uptrend line support since the price lows were hit mid-month, with charts suggesting that the next support at $56,000 is likely to be tested soon.
Where will crypto prices go?
This sharp wave of declines in cryptocurrency prices on Tuesday may turn out to be short-lived if Nvidia’s earnings report due on Wednesday comes out higher than expected.
Nvidia is one of the world’s largest companies and a key driver of the AI revolution, and its strong earnings performance over the last 12 months has been seen as a key driver of stock markets booming in the United States. As expected, this atmosphere has positively contributed to the recovery of the crypto markets.
Therefore, today’s announcement of strong profitability could create favorable conditions for the rebound in the prices of prominent cryptocurrencies, which means that the price of BTC may not stay long below the $60,000 level.
On the other hand, the data from the US Core PCE inflation index, due later this week, may support the general mood of market participants, as it is expected to strengthen the Federal Reserve’s confidence in the current conditions to begin a series of successive rate cuts over the next few fiscal quarters. Thus, this will support the Fed’s shift in language and policy orientation to become more moderate and investment-friendly.
The Federal Reserve is the least hawkish they’ve been since starting to raise interest rates.
The Fed Communication Index is in virtual free fall, dropping from its most hawkish level in 20 years straight towards dovish territory.
Rate cuts are coming for real this time. pic.twitter.com/cEYk0q9yYd
Finally, facilitating access to the liquidity needed for investment is expected to be one of the most important factors that can positively impact cryptocurrency prices in the coming years.
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The post A wave of declines hits the crypto markets after the depreciation of Bitcoin, Ethereum and Solana by 6%, 8.5% and 6.5%, respectively, what is happening? appeared first on Cryptonews Arabic.
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