Bitcoin and Ether Show Resilience During Market Sell-Off
Despite a calm summer for Bitcoin and Ethereum, 28 of the top 100 digital assets have lost 5% value today. Learn why Bitcoin and Ethereum are holding on here.
The summer of 2023 has showcased unique patterns in the crypto market. While Bitcoin (BTC) is having the most stable period of all time, Ethereum is also matching the trend.
However, the calm summer market is not the same for every crypto. In fact, the majority of the top 100 virtual assets lost 5% or more market value in the past 24 hours. The dip emerged due to rumors surrounding a major market maker stopping operations.
With the news spreading like wildfire, the industry encountered an unexpected halt. Let’s see how it affected major cryptocurrencies.
Bitcoin and Ethereum's Resilience
Despite the news affecting several assets, Bitcoin and Ethereum maintained their market status despite moderate correction. Both cryptocurrencies are merely down 1%, while most assets have lost more than 5% value.
In comparison, the fourth biggest digital asset in the market, XRP, lost over $1 billion in the market with a 4% dip. Similarly, LUNC (Luna) and APE (Bored Apes) also dropped more than 10% in market value. The movement proved once again how BTC and ETH hold much more resilience than most digital assets.
Crypto Market Volatility Context
The recent selloff is witnessed after crypto volatility hovered over all-time lows for a long time. A recent report by Glassnode suggested that the crypto market is experiencing a quiet patch, with volatility touching all-time lows. The report also suggested that the market movement might lead to investors waking up after reaching a stage of extreme exhaustion and apathy.
While the sentiment seems to be the same for the biggest crypto, Bitcoin is still expanding its dominance like never before. The crypto gained more than $1,500 in the previous week, crossing over the $30k mark. Despite that, BTC has maintained a healthy pattern of hovering around the $29k mark over the last few days. This was startling since Europe launched the first Bitcoin ETF recently. However, over the last 24 hours, Bitcoin price has marked an almost 7% fall at touched a low of $26,500.
The current Bitcoin correction is likely to be transient, with BTC's price poised for a swift rebound. This period of volatility presents an opportunity for traders to reassess and refine their trading approaches. Numerous traders have relied on the predictions for Bitcoin to anticipate the asset's trajectory in the coming months.
Meanwhile, Ethereum, the second-biggest crypto in the world, is also witnessing a plummet in volatility. Historically, both Ether and Bitcoin prices have matched each other. The pattern is repeated with the cryptos’ volatility as well. In fact, there are times when Ethereum’s volatility has dipped below Bitcoin’s. While most experts had not expected this flipping, it is only a sign of calm times. ETH predictions, for the most part, still predict the crypto to make a strong comeback in the upcoming year.
It is expected that this calm time will pass after the regulatory storm, summer silence, and dipping volumes wrap up, and volatility will return.
Factors Impacting BTC & ETH Prices
Even with volatility expected to come back, the current market still has several factors affecting the prices of Bitcoin and Ethereum. For instance, the news about Ethereum Futures ETF set to launch in the US is generating a huge buzz. Volatility Shares, an innovative ETF venture, recently announced its intentions to launch the ETHU (Ether Strategy ETF) in October 2023.
Despite the SEC delaying the approval of the Bitcoin ETF, the crypto community is thrilled about the upcoming ETFs. If Volatility Shares executes its plan perfectly, ETHU can become the first Ether-based ETF in the US. The community is also rejoicing the fact that crypto, a relatively new asset, is faring well against well-established financial tools, such as the S&P 500.
The August overview for the market shows that Bitcoin witnessed a 1% increase in August. Meanwhile, the S&P 500 witnessed a 3.3% dip during the period. Despite the sense of uncertainty surrounding crypto, Bitcoin is maintaining a healthy price above the $26,000 support level. As for Bitcoin and Ethereum breaking through resilience, ETFU will prove to be the most crucial factor to consider. Back in October 2021, Bitcoin launched its futures ETF in the US. The launch helped BTC make a 60% rally within a month. The trend continued until Bitcoin almost touched $69,000. If Volatility Shares also manages to repeat ProShares’ success, ETHU can rally the entire crypto community.
Conclusion
The summer has been full of contradictions for crypto and the entire financial market. While volatile assets such as crypto are showing extreme stability, the S&P 500 is losing market value. In fact, BTC’s volatility patterns have been even more stable than gold and tech stocks. As the second-biggest crypto in the market, ETH is also following the pattern. However, there are still 28 of the top 100 digital assets that have recently lost over 5% of market value.
These altcoins include names like XRP, the fourth biggest crypto, losing over a billion dollars in market cap. However, many are expecting this calm summer to be over soon, especially with ETH looking to launch its first EFT in the US.
Volatility Shares is trying to replicate what ProShares achieved in 2021 to break the all-time high of Bitcoin. However, the SEC is expected to delay the decision, which can cause a rift in ETH’s plan. Despite that, both Bitcoin and Ethereum are maintaining a resilient stand against the ongoing market dip affecting every asset regardless of its nature.
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