PANews reported on August 28 that according to The Block, BTC Markets cryptocurrency analyst Rachael Lucas said: "Today's downturn in the cryptocurrency market is not caused by a single factor, but seems to be the result of a combination of factors. Technical indicators show that the US dollar index (DXY) is oversold on the daily chart, which may mean that the US dollar may rebound, which usually puts downward pressure on risky assets such as cryptocurrencies." Lucas added that seasonal factors may be related to the market downturn. The "September effect" traditionally leads to poor market performance due to portfolio rebalancing, tax loss harvesting, and greater caution before the US election.
Analysts say the headwinds have been exacerbated by a large number of cryptocurrency liquidations reported in the last day. Glassnode data shows that over $287 million worth of long cryptocurrency positions were liquidated in the past 24 hours. Augustine Fan, head of insights at SOFA.org, said: "Short-term volatility is driven by buying, with traders rushing to buy downside protection (put options) as the underlying momentum due to oversupply and lack of on-chain catalysts in the short term remains poor." Ethereum prices continue to be under pressure as spot Ethereum ETFs report continued net outflows, recording their eighth consecutive day of outflows on Monday. Fan said that "the Ethereum mainnet is still in an identity crisis, causing Ethereum ETFs to continue to perform poorly." "The Ethereum Foundation has been criticized for selling Ethereum to obtain a $100 million budget, which will add more selling pressure, so Ethereum is in a more difficult situation than other cryptocurrencies," said Nick Ruck, an independent market researcher, in a statement.
BTC Markets’ Lucas predicts that if Bitcoin continues to trade below its 50-day moving average, a key technical level on the daily chart, then Bitcoin could fall to a low of around $56,000 in the near term. Bitcoin’s 50-day moving average currently sits at $61,991, according to TradingView data.
