Why Bitcoin's Price Action Is Concerning And 'Capital Preservation' Key

Heavily followed crypto trader Eugene Ng Ah Sio expressed his concerns about the future of cryptocurrencies and the potential for a deep recession.

What Happened: Ng Ah Sio in his latest X post on Tuesday stated that the current market structure for all major cryptocurrencies is either broken or looks extremely bleak. He also revealed that he was long on altcoins but had risk limits in place that unwound the book after Bitcoin BTC/USD lost the $60,000 mark. The trader added that he does not plan to rebuy these altcoins in the foreseeable future.

He attributes the recent market drawdown to factors including rising election odds in favor of Kamala Harris and the unwinding of the Yen carry trade. Polymarket shows Donald Trump still ahead of the Vice President by 53:44.

Ng Ah Sio also expressed concern about the possibility of a deep recession triggering deep equity bear markets. This triggers the worry of how cryptocurrencies will perform in such an environment. He advises "capital preservation" as the highest priority as since the start of the month, the market conditions have been very difficult.

Also Read: 6 Factors Causing The Crypto Panic: ‘Seems Like More Reason To Buy Than Sell,’ Says Expert

Why It Matters: The trader’s comments come amid a significant downturn in the crypto market. CoinMarketCap data shows the global crypto market capitalization slipped below the $2 trillion mark, down from a range of $2.2 to $2.6 trillion in the past few weeks.

Despite the drawdown, the trader observed a notable amount of complacency in the market. IntoTheBlock data shows an increase of 23.8% in large transaction volume and 149.2% growth in exchange netflows.

Eugene warned that investors who entered from much higher levels, believing that the downturn was a black swan event, might feel increasingly uneasy the longer the market stagnates. The CMC Fear & Greed Index noted that the crypto markets are currently in the fear zone.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next:

• Peter Schiff Thinks Bitcoin ‘Will Never Be A Reserve Asset,’ But Others See The Drop As A ‘Testament To Bitcoin’s Potential’

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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