Bitcoin started August 29 at $59k but experienced small increases that hot it as high as $61,100. However, the bulls failed to hold prices at the peak, leading to a correction. It is currently trading at its opening.
There are many speculations as to the reason for the apex coin inability to surge. Nonetheless, the biggest are in line with what caused the August 27th decline.
The 2-hour chart shows attempts at recovering $62,000 after losing it was ongoing before the sudden drop. The apex coin dropped below $59,000 in less than four hours, with the sharpest dip happening in less than ten minutes.
Negative Stock Earnings
Many traders monitor several metrics, including the CPI, PPI, and Job claims, to ensure that the US economy does not enter recession. When all indicators show mixed results, they turn to company earnings reports.
Observers are watching Nvidia and Crowdstrike’s upcoming announcements, which may reflect the true state of the economy. There are fears that these reports may be negative, affecting the overall sentiment across stocks and crypto.
There were mixed feelings, as some asserted that a positive or negative earnings report could force changes to the Federal Reserve’s plans for rate cuts in September. Bitcoin prices have reacted to the mixed sentiment from the stock market.
Although the results were positive, there are still fears of a possible change in the FED’s previous assertions.
A Drop in Network Activity
Aside from traditional assets, the apex coin has seen a drop in network activity in the last seven days. Less activity signifies less usage, indicating investors’ loss of interest in the asset. This comes barely weeks after the bitcoin funding rate on Binance dropped to its lowest in three years.
The negative network activity is the reason for less funding from the Asian market. The Korea Premium has remained negative for almost a month as the apex coin registered less funding from the region. ETFs may also register a significant shift in flow as on-chain data flips bearish barely hours reports of notable inflow made the rounds.
Nonetheless, miners contributed little or nothing to the current decline as they maintained their positions of moderate selloff.
August 27 was another big day for derivatives. The market heated up as the downtrend continued. Total Liquidations were $320 million in 24 hours, with long positions making up the bulk. Nonetheless, traders who traded on bitcoin lost over $95 million, and the bulls lost over $85 million during this period.
One such huge loss came from a bull who lost $12 million to the latest trend.
Since then, funding rates for derivatives have tanked, and investors are avoiding them. This is also reflected in the number of open interest, as the volume dropped by over 7% in 24 hours. The trend s ongoing amidst the little volatility across the market.
Elendu Benedict | September 4, 2024
