A rally in the leading cryptocurrency is deemed ‘inevitable’ as Bitcoin awaits U.S. inflation data next week, according to analysts at Matrixport.
#MatrixportOnTarget Report?-Aug 9: #Bitcoin is Oversold — A Relief Rally May Be Imminent?#Matrixport #cryptocurrency #Crypto #BTC #RSI #MarketWatch pic.twitter.com/HPaNNp2CzG
— Matrixport Official English (the only official X) (@Matrixport_EN) August 9, 2024
“Bitcoin is currently oversold. Historically, the coin tends to recover under such conditions. Upcoming inflation data could spur the bulls,” the report states.
While this macroeconomic factor remains crucial for risk assets, it has recently shifted “towards economic growth and labor market issues,” the company noted.
Experts believe traders may still react positively to a drop in inflation, especially if it falls below 3%.
“Protecting portfolios with inexpensive put options or using low-risk capital to buy call options has been an effective strategy for safeguarding Bitcoin in volatile times. As last year, 30-day volatility dropped to 20% before spiking,” Matrixport emphasized.
Analysts added that they have repeatedly warned of potential declines in trading volumes and market liquidity.
They advised monitoring whether traders are buying the dip. Despite a significant outflow from USDC last week, a larger inflow this week might indicate a re-entry by investors.
With the relative strength index at 30%, a buying opportunity may arise, as it did in June 2024, researchers believe.
Correction Outcomes
Glassnode reported that short-term holders of the leading cryptocurrency are experiencing the largest unrealized loss since the FTX collapse. This is attributed to Monday’s market downturn when Bitcoin fell to $49,000.
Short-Term Holders are currently holding the largest unrealized loss since the FTX implosion, which again highlights a point of serious investor stress imposed by current market conditions. pic.twitter.com/7hHbu2C7ZP
— glassnode (@glassnode) August 8, 2024
Experts say this underscores the “serious stress” investors face due to current market conditions.
Later, Glassnode published data indicating that the sell-off triggered a wave of panic among traders, with market participants recording approximately $1.38 billion in realized losses.
The sell-off triggered a surge in panic by investors, with around $1.38B in realized losses locked in by market participants. In absolute terms, this is the 13th largest event in history on a USD denominated basis. pic.twitter.com/mPf09pG8Qk
— glassnode (@glassnode) August 9, 2024
In dollar terms, this ranks as the 13th largest loss event in history, analysts added.
The cryptocurrency fear and greed index shows significant volatility. On August 8, it stood at 20, rising to 48 the next day as Bitcoin recovered to $60,000.
Technical analyst Ali described the market panic as “unsurprising,” given the unpredictable movements of digital gold. However, he saw an opportunity to buy amid investor fear.
No wonder why many are in extreme fear https://t.co/kWRuajWaB7
— Ali (@ali_charts) August 8, 2024
“Remember, be greedy while others are fearful,” he advised.
MN Trading founder Michaël van de Poppe highlighted Bitcoin’s V-shaped recovery.
#Bitcoin did provide a V-Shape recovery, through which this correction and crash due to Jump Trading selling crypto assets is comparable to COVID-19 —> A Black Swan.
As long as Bitcoin holds above $57,500, I think we’re in for a new ATH in September/October. pic.twitter.com/9evOPEa3RB
— Michaël van de Poppe (@CryptoMichNL) August 9, 2024
As long as the leading cryptocurrency remains above $57,500, the expert anticipates a new all-time high in September or October.
At the time of writing, Bitcoin is trading around $60,000, up 4.7% in 24 hours.
Previously, QCP Capital recorded significant purchases of December call options.
Earlier, analysts at Bitfinex described Bitcoin as a safe-haven asset amid recession risks.