Bitcoin and Ethereum prices crashed in recent days; however, they have started to recover. To discuss this, VirtualBacon posted on X discussing the effect of the BTC and ETH market crashes on altcoins like Solana, Avalanche, and Polygon.
Bitcoin price crashed below $55,000 recently, dropping below the 21-weekly EMA and the 200-day EMA, which is a key market shift. The move also broke the short-term uptrend that has been in place since last August.
But Is the Bull Run Over?
VirtualBacon doesn’t think the bill run is over. He mentioned that BTC has closed below the 21-weekly level in the past during mid-cycle corrections. One example was in August 2023, when BTC spent 63 days below this level before continuing to rally.
He also mentioned that the Bitcoin Rainbow chart cycle changes until halving. While Bitcoin remains below its all-time high after halving events. Bitcoin’s break below $54k has broken the pattern of higher highs and higher lows that started in October and could be the end of that pattern.
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Show more +Show less – So How Long Can This Correction Last?
The previous mid-cycle corrections lasted for about 70 days. Based on this, Virtual Bacon mentioned that the correction that started around July 4 could continue till around September, which could also align with major events that could trigger a bullish spike.
Three Factors That Can Cause a Major Price Change at the End of the Year:
The first is a change of leadership in the US. Based on VirtualBacon, Gary Gensler and the Biden Administration have hindered crypto adoption. So far, betting markets have shown a major interest in Donald Trump winning the election, which could cause a major change in price.
Rate cuts could begin on September 18th, and the CME FedWatch suggests there is a high probability of consecutive rate cuts, which could lead to what the analyst regards as an 11-month bull market for high-risk assets.
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Bitcoin and Stock market correlation is also a major factor to consider. Bitcoin price performance correlates with the NASDAQ and S&P 500. The analyst thinks Bitcoin’s price will continue to rise as long as the S&P is rising.
Bitcoin’s major dip is caused primarily by the selling action of the German action and Mt. Gox. However, major institutions like BlackRock are already buying the dip, and positive ETF inflows suggest that institutions are still confident about BTC.
How Does This Affect Other Altcoins?
VirtualBacon sees most altcoins dropping by 10 to 20%, and he advises accumulating strong assets like Ethereum and Solana.
They can also consider rebalancing into altcoins that are related to artificial intelligence (AI), gaming, meme coins, and other ones that are seeing retail adoption.
Bitcoin and Ethereum are crashing! What does this mean for your favorite altcoins like Solana, Avalanche, and Polygon or the memecoins you yolo-ed into back in March? I’ll take a look at major BTC trading signal triggered and whether this marks the end of the bull…
— VirtualBacon (@VirtualBacon0x) July 10, 2024
However, investors need to avoid older, underperforming assets and highly speculative altcoins until the market stabilizes.
The analyst will be accumulating more bitcoin around the $50,000 range. He will also buy other assets like Ethereum and Solana for between $2,200 and $2,600 and $100 and $110, respectively.
How to Know When the Bullish Rally is About to Continue
VirtualBacon mentions that a break above the 21-weekly EMA and a higher low are good triggers for a bullish rally.
So investors should stay patient until these things happen.
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