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August proved to be one among the hardest months for the crypto market, marked by a major decline in overall market capitalization, which fell to a six-month low of $1.96 trillion amid what analysts called “Black Monday.”
This downturn saw Bitcoin (BTC) plummet from $68,000 to roughly $49,000, igniting concerns amongst bullish investors. Nonetheless, market expert Lark Davis suggests that the choppy sideways price motion may soon come to an end, paving the best way for a possible surge as bullish aspects align for the fourth quarter.
Final Opportunity To Buy At Discounted Prices?
In a recent social media post, Davis highlighted that the approaching 3-4 weeks could represent a final opportunity for investors to accumulate their favorite cryptocurrencies at discounted prices.
Each Bitcoin and Ethereum (ETH) have seen notable declines, with losses of 6.7% and 5.7%, respectively, over the past week. Among the many cryptocurrencies that Davis identifies as particularly attractive, Solana (SOL) suits the bill because it is currently trading at around $129, down nearly 16% over the identical period.
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Despite these tempting prospects, historical data shows that September is often a difficult month for BTC. Evaluation shows that in six of the last seven years, Bitcoin has finished September within the red, with a median lack of around 4.5%.
If this trend continues, some analysts predict that Bitcoin could fall to around $55,000 by the tip of the month. This might have a ripple effect throughout the cryptocurrency market, as other tokens often mirror Bitcoin’s price movements.
A Key Catalyst For Crypto Market Recovery
Adding to the complexity of the present market landscape are upcoming rate of interest decisions that would significantly affect Bitcoin’s short-term volatility and long-term trajectory, as Bitcoinist reported on Monday.
Per the report, a possible 25 basis point cut by the Federal Reserve may signal the start of an easing cycle, potentially increasing liquidity and promoting long-term price appreciation for Bitcoin.
Alternatively, a 50 basis point cut could trigger an initial price spike, followed by a correction as recession fears resurface. Bitfinex’s recent report warns that a rate cut may lead to a 15-20% decline in Bitcoin’s price, with projections suggesting a bottoming out between $40,000 and $50,000.
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Despite the potential for short-term volatility, a notable bullish development could support Davis’s optimistic outlook. The anticipated distribution of $16 billion in money from FTX to its customers may inject significant capital back into the market.
Analysts imagine that a significant slice of this payout will likely be reinvested in cryptocurrencies, including Bitcoin and Solana, creating significant buying pressure for the last a part of the 12 months.
Ultimately, the potential influx of capital from the FTX distribution, combined with the expected cyclical surge within the crypto market within the 12 months of the Bitcoin Halving event, may lead to significant gains for various tokens and an overall increase in market capitalization.
The every day chart shows the entire market cap value drop to $1.98 trillion on Tuesday. Source: TOTAL on TradingView.com
Featured image from DALL-E, chart from TradingView.com