Bitcoin and Ether Up Over 3% as Traders Capitalize on Lower Prices

Bitcoin Ether Japan

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated: 

August 6, 2024

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Bitcoin and Ether

rebounded modestly on Tuesday after a sharp decline triggered by broader market jitters.

Bitcoin rose 3.6%, trading at about $55,988 as of 5:50 UTC, but is down 16% over the past week. Similarly, Ether gained 4.4%, reaching $2,526, though it has fallen 24% in the last week.

Analysts believe the recent price uptick signals that investors are taking advantage of the recent market downturn to purchase cryptocurrencies at lower prices. However, overall market sentiment remains wary as there are concerns that this could be the beginning of a more extensive liquidation of crypto holdings.

Bitcoin and Ether Navigate Through Market Turbulence, Japan’s Nikkei Rebounds

The recent downturn in cryptocurrencies, including significant losses in the last 24 hours, accompanies a broader sell-off of risk assets over the past three days. According to Coinglass data, this resulted in about $1.1b in liquidations on Monday, marking one of the highest levels of liquidations since early March this year.

The shift began when the Bank of Japan implemented a 25 basis point rate hike, its largest since 2008, just a few months after moving interest rates out of negative territory. This significant adjustment led to a substantial unwinding of the Yen carry trade, affecting global liquidity.

Despite suffering its largest single-day loss since the 1987 Black Monday crash the previous day, Japan’s Nikkei 225 and Topix indices rebounded sharply, gaining over 10% on Tuesday.

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“Global equity markets are selling off, bond yields are plummeting, and as a result, we’ve seen large outflows in the BTC and ETH ETFs as risk appetite is dampened,” John Glover, Leon’s chief investment officer, told Cryptonews.

“When the market feels like the Fed is behind the curve in cutting rates, prices of global risk assets tend to sell off fairly hard as concerns of a recession creep into the conversation,” he said.

“Only time will tell if that is the actual outcome, but for now downward pressure on the price of all risk assets, including crypto, will be the theme.”