(Kitco News) – It was a volatile and choppy Monday for asset prices ahead of a busy week on the data front as traders largely refrained from placing new bets in the markets until they get a better read on inflation from the upcoming PPI and CPI reports.
Bitcoin (BTC), stocks, and gold all traded in both positive and negative territory at various points during the day, with gold outshining the rest, trading at $2,470.10 at the time of writing, an increase of 1.62% on the 24-hour chart.
The major stock indices finished the day as a truly mixed bag, with the Nasdaq gaining 0.21%, the Dow losing 0.36%, and the S&P flat.
Rising economic concerns and chatter about a recession have made the going rough for risk assets, including Bitcoin, which has been stuck in a sideways range since late February.
“In August, we have seen a sell-off across all risk assets and Bitcoin has been no exception, experiencing a 33.32 percent decline from cycle high which is also our current All-Time High at $73,666,” said analysts at Bitfinex. “This was the largest such decline for BTC of this cycle.”
“Recently, the spot price of Bitcoin approached this 1SD band, highlighting the intensity of the recent market downturn,” they added. “Historically, only 364 out of 5139 trading days (approximately 7.1 percent) have recorded prices deviating below this level. This low percentage underscores the rarity and severity of the current price drop, indicating that the recent sell-off has pushed the price to levels seldom seen in relation to the short-term holders' cost basis.”
“This situation not only reflects the sharp pace of the decline but also serves as a crucial signal for investors about the extent of negative sentiment and potential stress among newer market participants,” they concluded. “Such insights are valuable for assessing market conditions and potential recovery scenarios.”
Data provided by TradingView shows that Bitcoin spent Monday oscillating around support at $59,000, hitting a low of $57,700 in the early hours and a high of $60,760 near midday.
BTC/USD Chart by TradingView
At the time of writing, BTC trades at $58,770, an increase of 0.20% on the 24-hour chart.
Echoes of past cycles
“Bitcoin has experienced a sharp drop over the past 2 weeks, causing a test of the 1W MA50 (blue trend-line), which as explained in a previous analysis, has only happened once during a Bull Cycle,” said TradingView analyst TradingShot.
“As today's idea shows though, what caused massive panic and liquidations recently, can be seen as merely a technical attempt of the market to re-adjust and harmonize what was a very aggressive bull run up until March, towards the mean, relative to past Cycles,” he added.
“More specifically in the last 2 Cycles, as you can see, 630 days after the Cycle bottom, Bitcoin was trading just below its 0.236 Fibonacci retracement level, while on the current Cycle the recent drop took place just over it,” TradingShot said. “This means that the current bull run came closer to the trend of the last two, but remains more aggressive.”
“As a result, we expect BTC to resume the rally and continue on a more aggressive tone than in the past and by early 2025 break above 100k and possibly by next Summer reach the -0.618 Fibonacci extension, a level that was achieved during all past Cycles,” he concluded.
Market analyst Quinten posted the following chart noting a similar development between the current Bitcoin chart and its chart from 2020 when market watchers warned of extended declines amid the onset of the COVID-19 pandemic.
Altcoins rally higher
Altcoins showed strength on Monday as 90% of the tokens in the top 200 recorded gains.
Daily cryptocurrency market performance. Source: Coin360
SATS (1000SATS) led the winners with an increase of 24.8%, followed by gains of 23% and 17.9% for Curve DAO Token (CRV) and Dymension (DYM), respectively. MANTRA (OM) fell 7.2% to lead the losers, while Golem (GLM) fell 5%, and ZetaChain (ZETA) lost 2.2%.
The overall cryptocurrency market cap now stands at $2.09 trillion, and Bitcoin’s dominance rate is 55.9%.
