Bitcoin (BTC) and Altcoins Retreat as Celestia (TIA) Becomes One of the Worst Performers

It was a sea of red in the cryptocurrency market on Aug. 16 as Bitcoin dropped below the key support level of $58,000.

The cryptocurrency market experienced a downturn on Aug. 16 as major digital currencies, including Bitcoin (BTC), continued to trade in the red despite a broader market rally. Most altcoins were also down, with some like Celestia (TIA) and Dogwifhat (WIF) posting double-digit losses.

Bitcoin dropped below the key support level of $58,000, extending losses for a third day in a row. The world’s largest cryptocurrency now trades at around $57,800, down by 1.5% over the past 24 hours.

BTC/USD 1-hour price chart. Source: TradingView

However, Bitcoin did see a slight recovery from earlier this week when it dropped to lows of $56,000 on Aug. 14. From its highs of over $60,000 last week, Bitcoin is now down by about 4%.

Most altcoins were also deep in the red, continuing to trade in a bear market. Celestia, WIF, Ethena (ENA), and Sui (SUI) were among the worst performers, each posting losses of over 10% in 24 hours.

Celestia is now down for three consecutive days of losses, having fallen to lows of $5.10 on Tuesday. The token, which rallied by over 3,200% to start 2023, is now down by over 75% from its highest point this year.

Meanwhile, WIF, the popular meme coin, dropped for four straight days and is down by over 71% from its all-time high. Similarly, cryptocurrencies like Pepe (PEPE) and SUI dropped by more than 10% in 24 hours.

Crypto market sees mixed price action despite broader market rally

Bitcoin and many altcoins have retreated even as broader market conditions have improved. The U.S. dollar index dropped to 102, while U.S. equities are on track for their best week in months.

This price action comes as a surprise to some traders, especially considering that the S&P 500 index rose by 1.5% on Monday, reaching highs of 4,200 for the first time since April.

Moreover, the Nasdaq Composite index also rallied by over 2%, extending gains for a second day. At the same time, the Dow Jones Industrial Average climbed by 0.8%.

Several possible reasons for the crypto market downturn

There are several possible reasons for this price action. First, many traders are likely keeping away from crypto after the substantial liquidations that occurred on Aug. 5, when digital currencies and stocks plunged.

Data by CoinGlass shows that total bullish liquidations stood at over $700 million on that day. A likely indication of this is that Bitcoin’s open interest in the futures market has stalled at $69 billion this week.

Additionally, the volume of cryptocurrencies traded on major decentralized exchange (DEX) and centralized exchange (CEX) exchanges has dropped by double digits in the past few days.

Secondly, there is no clear catalyst that traders can get behind and bears can’t ignore. Earlier this year, the narratives focused on the Bitcoin and Ethereum exchange-traded funds (ETFs) and the Bitcoin halving event, which have all taken place.

Thirdly, there are technical concerns in the market now that BTC and Ether have formed a death cross pattern. Analysts are now bearish on crypto after the 50-day moving average crossed below the 200-day moving average on both price charts.

Analysts remain bullish on crypto despite the downturn

Still, some analysts believe that Bitcoin and other cryptocurrencies will bounce back later this year. In a note, Michael van de Poppe, a popular crypto analyst, predicted that the rebound will start to happen in September.

“The final weeks of pain are happening on the markets. From September onwards, it’s again the best period of the cycle for Bitcoin and crypto. BTC valuations are slowly grinding upwards already.”

Earlier this month, van de Poppe said that Bitcoin could rally to $100,000 by the end of 2023. The analyst added that he expects the crypto market to rally into the first quarter of 2024 before a potential bear market begins.

In a separate but similar tone, Miles Deutscher, another analyst, noted that investors were slowly accumulating, a move that could lead to a strong comeback later this year.

“This feels eerily similar to August-October last year.

– Retail interest is evaporating fast (YT views have fallen off a cliff over the past week)

– Apathy amongst existing market participants

– Lack of clear narratives

(and the Bitcoin price action looks identical too)”

Some companies have already started

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