A solid week for crypto traders turned out to be a downturn at the end. The crypto market starts a new week being around 4% down in the last 24 hours, which brings the total market cap to below $2.1 trillion.
I for sure asked myself, and I am sure you did too if you are even remotely involved in crypto – why are crypto prices dipping today?
Bitcoin’s Psychological Level Breach
Bitcoin lost the $60k level during the weekend. Losing a psychological level like this almost always puts traders into a panic mode, and then altcoins suffer too. When Bitcoin drops, it often creates a ripple effect throughout the market. Most top altcoins such as TON, LINK, or SOL are down roughly around 5% today.
This domino effect is not uncommon in the crypto world. As Bitcoin is the largest cryptocurrency by market cap, its movements tend to influence the entire market sentiment.
Ethereum’s Slow Price Action
Ethereum is also having an indescribably slow price action nowadays. When BTC ETFs were approved in early January, Bitcoin started pumping around a month later.
ETH ETFs were approved in May but started trading in early July, over a month ago. We don’t see any pumps as of yet for ETH; in fact, the price is now trading well below $3k, a level that was able to be maintained for most of this year.
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A lot of traders and crypto enthusiasts are frustrated with market performance this year. Especially in the last 2 months, we had 2 crashes, one in July and a second one (even bigger) in August. In both cases, top cryptos plunged by 10% or more.
Read also: Kaspa Ready for Another Price Rally? Analyst Predicts KAS Top 10 Potential in 2024
Seasonal and Political Factors
Summer months are always slow for crypto. People go on vacations, spend more time outside, at seaside etc., and just care less about crypto. This seasonal trend often leads to reduced trading volumes and less market activity.
Another strong reason for slow market price action in the last few weeks is the fact that Trump, a very much pro-crypto candidate for US president, is now behind Kamala Harris on most major polls. Us elections can potentially heavily affect the crypto prices.
Latest numbers from Polymarket show that Kamala now has a 52% chance of winning the elections, and Trump has 45%.
This has caused a lot of Trump coins and the meme market as a whole to suffer too.
Finally, historical data doesn’t favor Bitcoin 6-9 months after the halving, and the most recent one happened in April. So if we want to believe historical numbers, we shouldn’t expect any major Bitcoin price pumps before October.
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