Bitcoin Faces Risk of Further Price Crash – What to Expect

Bitcoin has experienced a 10% decline in value over the past week, dropping from a peak of $69,801 on July 29 to around $57,000.

This price drop suggests a potential buying opportunity, yet trader activity indicates reluctance to invest during this dip.

An important indicator, Bitcoin’s market value to realized value (MVRV) ratio, suggests the cryptocurrency might be undervalued. Santiment reports negative MVRV ratios for 30-day and 90-day periods, both below zero, signaling that Bitcoin’s market price is lower than the average purchase price of its tokens.

Typically, a negative MVRV ratio points to a good buying opportunity, but traders are currently cautious, fearing further declines.

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The BTC Fear and Greed Index stands at 34, reflecting a fearful market sentiment. On-chain data provider Santiment notes that unlike a similar dip in early July, current market participants are not eager to buy the dip.

🤷 With this dip being roughly on par to the one we saw in early July, the same crowd enthusiasm for dip buying isn’t present… at least not yet. Look for $60K BTC or $2.9K ETH to be key psychological levels that may be enough for traders to open their wallets. pic.twitter.com/rRSVFMY4AW

— Santiment (@santimentfeed) August 3, 2024

Analysts warn that negative sentiment in the crypto market and adverse macroeconomic factors could push Bitcoin’s price to $50,000 or lower. CryptoQuant analyst Abramchart highlights that Bitcoin has failed to maintain the short-term support level of $64,580.

If it continues to fall, it might target the $53,000 to $54,000 range. Additionally, 10x Research points out that weakening economic indicators and potential stock market declines further increase this risk. They also suggest that a possible emergency rate cut by the Federal Reserve, in response to a declining stock market, could worsen Bitcoin’s decline by signaling economic distress rather than recovery.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.