Crypto Market Review, August 29

Jerome Powell’s live stream was enough to cause billions in damage to both the financial and digital asset markets. Following the chairman’s forecast, most risk assets took another hit and fell back to June’s levels, and Bitcoin is no exception.

What’s next for digital gold?

With the plunge to $20,000, Bitcoin has entered an accumulation area formed back in June when the price of the first cryptocurrency consolidated in the $17,000-$20,000 range. With the help of retail investors betting on a long-term reversal of the asset, we saw a bounce to $25,000.

Since BTC failed to deliver on the expectations of those who grabbed the asset at an average price of $18,000, it is less likely that we will see a repeat of this scenario if the coin falls back to the values ​​we saw back in June.

Somehow, Bitcoin’s inability to make new highs during the recent rally doesn’t mean we won’t see an increase in buying volume. At this point, BTC may enter a reversal for another reason.

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According to the funding rates on the largest derivatives trading platforms such as Binance and Deribit, the number of short orders dominates over longs, meaning that bears are paying bulls to open longs. Such a condition shows the possibility of a short squeeze if unexpected purchasing power arises on the market.

For now, Bitcoin’s volatility returned to the extremely low level we saw between August 21st and August 25th. The drop in volatility suggests that traders and investors are not yet ready to support the reversal of the first cryptocurrency.

What are altcoins?

As expected, alternative cryptocurrencies are following Bitcoin and showing an absence of upward momentum. Obviously, the main reason behind massive outflows from the market.

Unfortunately, there are no factors that can give us a hint of a potential change in the situation as the market no longer expects much from the Merge update, while Ether lacks network usage and sees a decisive drop in revenue.

Meanwhile, the AAVE cryptocurrency scandal erupted when CryptoLeaks revealed that Ava Labs encouraged lawyers to attack competitors such as Solana and Binance to influence their rate of development. Following the publication of the article, AVAX saw a flash crash, with the value of the token falling by 20% in two days.

While the story certainly boosted the token’s value, the main reason behind the fall is the state of the market and Bitcoin’s filthiness.