Analysts believe that Bitcoin and Ethereum could fall further in the short term.
Bitcoin (BTC) and Ethereum (ETH) have recovered 21% and 18% respectively from their lows following the crash on August 4.
But Aurelie Barthere, senior research analyst at Nansen, told CryptoSlate that the worst may not be over yet. She explained:
“BTC (and ETH) have hit a local bottom, but the daily trend still looks negative. The 50-day moving average is trying to break below the 200-day moving average.”
Barthere added that this creates a technical pattern known as a “death cross,” which typically precedes a price decline.
Therefore, to avoid a bearish signal on the chart, analyst Nansen explains that BTC needs to stay above the $62,000 price level. However, the current all-time highs between $70,000 and $71,000 are still a strong resistance limit.
Barter added:
“Psychologically, some traders were hurt by the sell-offs in March and July and this could be a very difficult threshold to cross.”
Meanwhile, ETH shows a strong correlation with BTC, especially during sell-off periods. The analyst points out that ETH has already seen a death cross on the daily chart and should remain above $2,700, a significant resistance that was tested in January and this week.
Cryptocurrency Markets Slump Due to US Election
The massive selloff in risky assets seen earlier this week was due to the Bank of Japan (BOJ) cutting rates too quickly, unwinding the yen carry trade.
Bitfinex analysts shared with the publication that the BOJ’s move would allow for a gradual clearing process, which would act as a relief to most leveraged traders, especially those in the United States.
So, according to Bitfinex analysts, the most important story affecting the cryptocurrency markets more than any other is the U.S. presidential election.
Analysts added:
“With Democratic candidate Harris now likely to win with roughly the same odds as the Republican nominee, former President Trump’s odds of winning have also increased, creating uncertainty in the markets, especially cryptocurrencies.”
At the time of writing, Harris and Trump Tied up The prediction market Polymarket had the Democratic candidate at 49% odds. surpass for a moment Former US President today.
According to analysts:
“Based on recent events, the market has made it clear that a Trump win would be a net gain for cryptocurrencies, while a Harris win would be the opposite.”
If Trump’s odds of winning are at their current low, Bitfinex analysts expect the market recovery to continue.
