Over the past few weeks, the price of Bitcoin and the prices of other cryptocurrencies have seen a sharp increase. Bitcoin surged above $24,000. Unfortunately, in recent days we have again seen negative developments in the market. In this article, we want to give a weekly recap of cryptocurrencies.
What has happened to cryptocurrencies in recent weeks?
Unfortunately, in recent days we have been able to observe the trend that the price of Bitcoin and thus also the prices of other cryptocurrencies have lost a lot of value again. Bitcoin price fell to the $21,000 area. Ethereum fell to $1,600 when it was previously trading at around $2,000.
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With the price of Bitcoin falling, hopes that cryptocurrency prices could continue a sustainable bull run in the coming weeks have faded. Because last month the bear market had a massive impact and Bitcoin price fell from $68,000 in November to below $18,000 in June.
What were the reasons for the Bitcoin crash?
Over the past few days, the Bitcoin price has lost more than 10% in value. Ethereum lost more than 15%. These values surprised after the last bullish weeks. But what happened and why did the uptrend in cryptocurrencies stop so suddenly?
On the one hand, there are new worries among investors. The US Federal Reserve would like to meet again in September and discuss further interest rate hikes. Rate hikes are a problem for risky investments like cryptocurrencies. These become less attractive with higher interest rates. In particular, rumors before increases usually drive prices down because investors are scared.
Additionally, the hype surrounding the upcoming Ethereum merger has leveled off somewhat. Investors have been buying ether on anticipation for a few weeks. But the closer the merger gets, the more investors sell. With this, we see a drop in the price of Ether, which also affects many other Alt-Coins.
Why is Ether selling?
The Ethereum merger is one of the biggest events for Ethereum in recent years. Investor enthusiasm is high, as evidenced by Ethereum’s massive gains over the past few weeks. But in recent days there has been a strong correction on Ethereum, even stronger than on Bitcoin.
A precaution taken by Ethereum contributes to this. Ethereum stakers cannot sell their ether immediately after the merger, but can only access it after 6-12 weeks. This is how Ethereum wants to prevent a sell-off. The closer the merger gets, the more preemptively investors sell the token.
Will cryptocurrencies continue to fall in the coming weeks?
Analysts currently assume that Bitcoin has established a strong support zone in the $20,000-$21,000 range. It is possible that the price of Bitcoin could rise again from this value in the coming weeks. The Relative Strength Index, an important parameter for Bitcoin price, indicates that Bitcoin is rather oversold at the moment, which makes increases more likely.
The price of Bitcoin is the most important value for the overall market price. If it rises again, the prices of other cryptocurrencies could also rise massively again. However, there is also a risk of the support breaking. Many voices continue to believe that Bitcoin price could fall to another yearly low below $15,000.
Is it the right time to invest in cryptocurrencies?
Many factors suggest that we are currently at the bottom of most cryptocurrency prices. Another drop is still possible, but not certain. A slight stabilization by the end of the year is more likely. Bitcoin price is expected to stabilize between $20,000 and $30,000.
It is therefore an excellent time to buy cryptocurrencies such as Bitcoin, Ethereum or Cardano at a lower cost. In the long term in particular, prices should rise again massively. However, there is also potential for moderate short-term price gains.
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