Crypto Market Bleeds: Is This the Right Time to Buy the Dip?

20-12-2024 By: Lokesh Gupta
Crypto Market Bleeds

Crypto Crash Alert: What’s Next and Should You Invest Now?

Bitcoin and Ethereum Prices Plunge as Market Volatility Intensifies

Introduction: Market-Wide Crypto Downtrend

Over the past 24 hours, the cryptocurrency market has faced intense selling pressure. Bitcoin’s value dropped by 8.80%, trading near $93,200, while Ethereum recorded a substantial 15% decline, landing around $3,150. Leading altcoins, including Solana, Cardano, and XRP, also registered double-digit losses, signaling widespread bearish sentiment.

Macroeconomic Factors Impacting the Crypto Market

Federal Reserve Chair Jerome Powell’s recent comments hinting at a slower pace of interest rate reductions in 2025 coincided with Bitcoin’s downturn. Concurrently, U.S. Bitcoin ETFs witnessed a hefty net outflow of $680 million after 15 consecutive days of inflows. Major institutions like Fidelity and Grayscale made significant withdrawals, amplifying uncertainty.

El Salvador’s Policy Shift Amid IMF Conditions

El Salvador, the pioneering nation to legalize Bitcoin as tender, has agreed to alter its Bitcoin policies under a $1.4 billion loan agreement with the International Monetary Fund (IMF). This political and economic move has further contributed to Bitcoin’s recent slump.

Bitcoin Price Slips Towards Key Support Range

Despite the market’s downward trajectory, the Fear and Greed Index surprisingly remains in ‘Greed’ territory. While some investors maintain a bullish outlook, Bitcoin’s week-long slide of 4.8%—breaking critical support levels between $94,500 and $94,000—suggests a more cautious stance. The next significant support range for Bitcoin is now at $91,500-$90,500.

Bitcoin Price chart

Ethereum Struggles Beneath Key Resistance Levels

Ethereum’s failure to breach the longstanding $4,000 weekly resistance—tested multiple times since 2021—led to a steep decline below crucial support levels at $3,550 and $3,200. With prices trending toward the $3,000-$3,050 zone, holding this range could present a viable buying opportunity. A sustained defense at $2,800 is critical for Ethereum’s near-term recovery.

Ethereum Price chart

XRP’s Pullback After Testing the $3.00 Threshold

XRP encountered strong resistance at the psychological $3.00 mark and has since retraced to the $2 support level, aligning with the 38.20% Fibonacci retracement. If bullish traders protect this support, XRP could potentially aim for a new all-time high, driven by renewed momentum and positive market sentiment.

XRP Price chart

Solana Slips into a Technical Bear Market

Solana’s price action has turned bearish following the Federal Reserve’s hawkish policy indications. Over the past month, Solana has been confined within a falling wedge pattern. Recently, it broke below the critical $200-$185 support zone and now trades around $176—a 16% dip influenced by broad market sell-offs, declining total value locked (TVL), and reduced on-chain participation. If bulls can hold the $165 level, Solana may rebound, potentially targeting the $200-$250 price range in the near term.

Solana Price chart

The crypto market remains in flux, with traders closely monitoring key support and resistance levels to navigate the ongoing volatility.

Also read: Why Crypto Is Down Today: What to Expect From Bitcoin And Altcoin
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