Is a Big #Bitcoin Crash Coming?

That's the sentiment and the primary question. The crypto markets have been terrible in return for 2024, through which the general consensus is whether a big crash is occurring.

Bitcoin price has remained a subject of concern among traders and investors, particularly with the recent market downturn and speculation about a possible crash. However, the founder of MN Capital has expressed optimism, reassuring investors that such fears are unfounded.

In his view, the current market fluctuations are part of normal cyclic movements and do not indicate a precursor to a large-scale crash.

Bitcoin price has shown resilience, rising by almost 1% in the day. At the time of writing, BTC traded at $55,636. This upward trend is observed despite the broader market backdrop and concerns over its further evolution.

Meanwhile, whale activity has once again shown interest in Bitcoin. On-chain data highlights that since September 1, these three whales have purchased about 2,814 BTCs. At an average price of $55,887 each, their total purchase is valued at approximately $157.3 million. These large purchases indicate a strong belief among major investors in the future value of Bitcoin, further bolstering the notion that a market crash is unlikely.

Market Indicators Point to Stability Amidst Downtrend

Despite the current market status, particularly for Bitcoin, may not be as dire as it appears. The following charts show that the BTC price is still trading within a descending channel, indicating a potential trend reversal in the current bearish market.

Highlighting the possibility of a breakout, several experts and investors speculate on Bitcoin price rising above a critical resistance level, which is currently positioned slightly above $55,000.

As BTC whale activity continues to rise, investors observe that Bitcoin price is getting close to its resistance level in the current price charts. A breakout could lead to the price returning to the $60,000 range. However, some market participants remain cautious, viewing the current correction as a normal process in the Bitcoin market cycle and the foundation for further growth.

The founder of MN Capital noted that this is quite natural in cryptocurrencies. Although, the decrease of about 26% from its recent all-time high is not alarming. Therefore, it is a regular market going through natural cycles and not a prelude to a significant crash.

Whales Signal Confidence Amid Fear and Greed Index Concerns

Another clear indication that Bitcoin has a bright future is the accumulation of the large holders, the so-called “whales.” Whales are usually inclined to make long-term decisions, and the recent trends indicate their expectation of a comeback. Since early September, three whales have bought a lot of BTC, using the current low prices that the market offers after the correction.

The Fear and Greed Index, an important tool to measure the market’s sentiment, is currently at 22 points, that is, the levels observed at the time of the FTX exchange crash in November 2022. This measure, which captures the sentiment of fear of the investors in the market, can be used to identify entry points by contrarian investors.

The founder of MN Capital pointed this out in his analysis, stating that even though the sentiment is negative, the market fundamentals are much better than the ones that existed during the FTX crisis.

In his view, it could be unwise to have a negative outlook as the price of Bitcoin currently stands at roughly $55,000, which is still far from the record high. This year’s environment is much better than last year’s when the market faced significant losses due to major crashes. Institutional interest has been growing, and the macroeconomic situation is more favourable.

Looking Ahead: Market Dynamics and Bitcoin’s Next Move

As such, many see key markets’ weak economic growth and the Federal Reserve’s potential interest rate cuts as positive for Bitcoin’s price as they may see fresh liquidity injection. Historically, Bitcoin has performed well when there is increased liquidity. Many analysts have pointed out that a massive inflow of liquidity from the US and other international markets could catalyze the next bull run of Bitcoin.

Also, the current market situation has been compared to the 2019-2020 period, during which external conditions like the COVID-19 pandemic boosted the bull market in Bitcoin, which had a rough few days.

Although there is no such black swan event in place at the moment, most experts believe that macroeconomic indicators, such as increasing inflation and overall economic instability, may well spark the next rally of Bitcoin.

The founder of MN Capital believes that this cycle may be the most natural of the previous ones because it is not associated with a particular event but with the general development of the market. According to the author’s current assessment, the risk of a sudden and severe market crash is also negligible. However, such a price correction may lead to significant gains due to increased liquidity.

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