Even as Bitcoin BTC/USD and Ethereum ETH/USD have experienced a significant price drop over the past 24 hours, a new report states both cryptocurrencies have fallen below critical support levels, potentially signaling a shift in market sentiment.
According to 10x Research, Bitcoin has slid below its critical support level of $68,330, a move that has raised caution among traders and market watchers.
This downturn comes amid stronger growth and inflation data, potentially impacting expectations for interest rate cuts, with cryptocurrencies possibly reacting more swiftly to these macroeconomic signals than other asset classes.
The situation is mirrored by Ethereum, which has fallen through its support range of $3,460 to $3,500.
This breach jeopardizes Ethereum’s previously forming bottoming-out pattern and sets it on a trajectory that could see it retest the $3,100 level unless there’s a swift recovery.
The crypto community is also closely watching the potential impact of the Securities and Exchange Commission’s decision on an Ethereum ETF, with prediction markets currently skeptical about an approval in May 2024.
Adding to Ethereum’s challenges are its weakened fundamentals, with current revenues reflecting levels seen when Ether prices were around $1,500.
The total value locked (TVL) in the platform suggests that Ether’s price might more accurately be around $2,500, indicating a possible overvaluation at recent price levels.
This market turbulence comes at a time when the cryptocurrency trading volumes have seen a decline, particularly in markets like Korea, known for their vibrant altcoin trading activity.
The drop in ETH Gas fees further underscores the slowdown in network activity post the Dencun upgrade.
As the Federal Reserve’s monetary policy outlook shifts towards a less dovish stance than previously anticipated, the broader macroeconomic environment may also play a pivotal role in the future direction of cryptocurrency prices.
With the potential for fewer rate cuts than expected, the financial landscape could pose additional challenges for the crypto market.
As the digital assets community navigates these uncertain waters, the Benzinga’s upcoming Future of Digital Assets conference on Nov. 19 will undoubtedly feature in-depth discussions on these market dynamics.
Read Next: Bitcoin Could Hit $150K, Says Mark Yusko, But Not Everyone Agrees It’s ‘A Better Form Of Gold’
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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