Are we heading for another crypto crash?
BTC and ETH plunged 11% and 15% in the last 3 days…
Just when you thought the crypto bull run will continue, we got another correction in the crypto markets.
In the last 3 days, Bitcoin (BTC) and Solana (SOL) are down 11% each, while Ethereum (ETH) and Cardano (ADA) both fell 15%.
Does that mean we’re heading for another crypto crash?
I don’t think so…
Why is crypto down?
The recent correction has to do with the US macroeconomic situations.
Investors worry about the ongoing US economic slowdown and whether it will lead to a recession.
Moreover, the Fed said it will only cut interests rates gradually, and markets were expecting aggressive 50bps cuts. This puts further pressure on the economy.
When will crypto go back up?
A short-term catalyst that could send crypto prices flying again is Nvidia earnings.
As the second-largest company in the world, NVDA has the power to sway market sentiment.
Nvidia will report Q2 earnings at 5PM EST.
Big picture view: the crypto bull run remains intact…
Some folks are saying that the bitcoin halving theory is dead, but I disagree.
The current price action lines up with how the bitcoin halving cycle usually unfolds.
After each halving, there’s a period of accumulation lasting a few months before the big move higher:
And as you can see, the lion share of the profits, about 80%, are made in the last 20% of the cycle. The period we’re moving into now.
But beware, crypto markets will likely remain volatile until after the US elections…
August is typically the worst month for crypto performance, but September isn’t far behind:
And while crypto prices tend to kick back into high gear in October, it could be different this time around.
Historically, crypto would trade sideways going into US elections… followed by a rally after the die is cast:
Bottom line: I don’t expect crypto markets to make new highs until November 5, 2024. Don’t be surprised if we see a mini crypto crash in between. Use it as a buying opportunity to load up on the best cryptos (I list 3 here). The crypto bull run will continue into 2025.
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I publish fresh research on cryptocurrencies and stocks every M/W/F.
— Stephen McBride, Chief Analyst at RiskHedge
