The recent sharp price drops of Bitcoin and Ethereum have caused widespread concern among investors. Bitcoin's drop below $55,000 triggered a major trading signal, breaking the short-term uptrend since August last year. Historically, similar adjustments last for more than two months before the bull market resumes.

Cryptocurrency analyst VirtualBacon pointed out that the recent market decline is not just due to the sale of 27,000 Bitcoins in Germany, but also related to broader issues such as interest rate hikes, presidential election results, SEC decisions and ETF inflows. In addition, external factors such as Mt. Gox's possible sale of 142,000 Bitcoins have also put additional pressure on the market. Although this decline may be worrying, he advises not to make a knee-jerk reaction.

Institutional investors buy at a low point

Despite the decline in Bitcoin prices, the good news is that large institutions such as BlackRock and Fidelity are buying on dips, indicating strong institutional confidence. The recent correction began on July 4 and may last until September, consistent with the mid-term cycle correction that historically lasts 60-70 days. In addition, Bitcoin's price action is often correlated with the Nasdaq and S&P 500, suggesting that as long as these indices rise, Bitcoin is likely to rise with them.

Entering altcoins

VirtualBacon has expanded his horizons and turned his attention to altcoins, looking for hidden gems amid the chaos. He noted that despite the expected 10%-20% declines in several altcoins such as Solana, Avalanche, and Polygon, strong assets such as Ethereum and Solana are still worth accumulating. According to the analyst, both assets are expected to perform well, with Ethereum benefiting from the upcoming launch of an ETF and Solana showing resilience during the recent market turmoil.

Best buying opportunities by industry

However, investors are advised to focus on companies that are performing well and consider promising sectors such as artificial intelligence, gaming, and meme coins. As many new tokens have liquidity issues, the above sectors may perform well when old tokens lose value. Experts say that if meme coins or other altcoins are considered, portfolio adjustments should be made gradually over 2-3 months.

Will the bull market continue? If?

The bull run is expected to resume when Bitcoin breaks above the 21-week EMA and makes a higher low. It is recommended to remain patient and strategically accumulate strong assets during this period. According to analysts, key price targets include $50,000 for Bitcoin, between $2,200-2,600 for Ethereum, and $100-110 for Solana.

While the transfer of funds to the exchange suggests that Germany may be intending to liquidate, it does not confirm that the assets have been sold. In addition, FTX's bankruptcy estate will distribute approximately $16 billion in cash to cryptocurrency investors around September or October. This distribution is expected to be a positive catalyst for the market in the coming months.

By championing strategic moves, identifying key levels, and exploring opportunities in diverse sectors, he helps investors navigate difficult times and confidently capitalize on emerging trends.