Altcoins enter deep correction while Bitcoin and Ethereum maintain stability. Popular altcoins like Ripple’s XRP experienced over 5% decrease recently.
The cryptocurrency market has started a downward spiral that is concerning traders worldwide. The industry is witnessing most altcoins entering a deep correction. However, household names like Bitcoin and Ethereum are maintaining their stability. The previous week witnessed BTC breaking important support levels, dropping to the $26,000 mark.
This triggered the market to enter a steep correction phase, with other altcoins dropping even further. But Bitcoin and Ethereum managed to gain stability while big names like XRP experienced a 5% drop.
Similarly, Polygon, Cardano, and Solana also saw a dip of approximately 3%. The ripple effect reached DeFi tokens as well, causing Cosmos token and Uniswap coin to lose 3% and 2% value, respectively.
The trend has caused traders to reevaluate their strategies with a precise BTC forecast. Currently, Bitcoin is trading at around $26,457 with a market cap of $515,112,315,524. Its 24-hour trading volume is set at $16 billion, whereas the crypto has fluctuated +2% in the previous 24 hours. The crypto also has a circulating supply of 19,466,281 BTC.
Bitcoin made history a couple of weeks ago after it beat the volatility rate of tech stocks, S&P 500, and gold. Crypto shook the financial market by gaining stability that has only been seen twice before.
However, Bitcoin price led to a sharp 11% dip on Wednesday afternoon (16th August). At this point, the price of Ethereum dropped 0.18% in market value to reach $1,674. Currently, the second-most popular crypto in the market is faring better than most altcoins. Its market value is placed at $1,631, with the 24-hour trading volume reaching $7,466,234,862.
The crypto has dropped 1.87% in market value in the previous 24 hours. However, it still boasts a market capitalization of $196,166,961,099. Despite BTC and ETH showcasing resilience against market factors, the overall dip is troubling traders.
That is why traders are also scrolling through every Ethereum speculations to gauge an assessment of the situation. Before understanding why the market is going through such a movement, let’s get an overview of BTC and ETH’s future outlook.
The Future Outlook of Bitcoin and Ethereum
$26,000 has been Bitcoin’s most critical support zone throughout the year. Although the crypto is barely above the line currently, it should be eyeing to break through the foothold at $26,500. The next step on the list would be crossing the $27,300 level, which will solidify Bitcoin’s position. However, a dip below the $26,000 mark will shift the new support line to $24,800.
Going that route will ultimately put BTC in the way of testing the $24,000 level, which can be disastrous. On the other hand, Ethereum is also testing its $1,650 support level. The crypto recently lost its foothold from the sturdy $1,750 level, causing it to test the next line. Now, despite the bullish pullback regarding ETH, the market structure is indicating a retest at the $1,400 level.
As for the recent crypto spiral, the biggest factor is being considered the external pressure in China. Asia holds a massive stake in crypto, especially with Singapore and Hong Kong accepting the assets.
Moreover, the brewing regulatory allegations by the SEC have hurt several well-known crypto names. The SEC filed 13 charges against Binance and Changpeng Zhao in August 2023. The parties are accused of misleading traders and investors. At the same time, the parties operated an unregistered exchange that eventually became the biggest crypto exchange. Binance CEO Changpeng Zhao is also accused of creating an elaborate scheme to avoid US federal securities laws.
Similarly, Coinbase is also under fire as the platform is fighting against the SEC’s charges filed back in June. The allegations stated that Coinbase had broken several securities laws by running as an unregistered broker, clearing agency, and exchange. While Coinbase is still defending against the allegations, traders are wondering whether the feud can end up like the Ripple vs. the SEC case.
Ripple won a hard-fought battle against the Securities and Exchange after 2 long years after the SEC filed similar complaints against XRP. If Binance and Coinbase manage to make it out like Ripple, the crypto market will gradually stabilize. However, a forced push by the authorities can lead to a similar situation to the FTX. Since both parties understand that, everyone involved in the case is treading carefully.
The recent couple of months have been contradictory for the crypto industry. The market has shown its ability to maintain stability, which is highly uncharacteristic for crypto. The fact that BTC can outperform gold and S&P 500 in volatility shows how unusual the assets have been moving. However, it is only Ethereum and Bitcoin that have maintained such resilience. Other than the two, most altcoins have suffered and recently went into steep correction. A major reason behind the dip is the growing external pressure in China. Given Asia’s prominence in the crypto market, the region affects it greatly.
At the same time, the SEC is going after big names like Binance and Coinbase, which is hurting the market. If BTC and ETH can maintain their resilience for a while, the cryptocurrencies might help the market make a convincing comeback. On the other hand, constant pressure from the SEC and regulatory frameworks can spell trouble for the market.