An Opportunity in Disguise?
Subscribe to newsletter
Insights
->
Weekly Newsletter
,

An Opportunity in Disguise?

Aug 6, 2024
An Opportunity in Disguise?An Opportunity in Disguise?Video Thumbnail

This Week in Crypto

Yesterday, the cryptoasset market was down by 17%, and Ethereum has had its worst trading day since 2021. Following the turbulent hours of the first trading day of the week, our research team broke down some of the primary factors driving markets; you can have a look here.

This morning, we saw some signs of recovery after yesterday’s sharp market drop. Here’s what happened where we left off on Monday:

  • Japan stocks rallied more than 9% on Tuesday: NIKKEI 225 (+10.23%), TOPIX (+9.30%).
  • Crypto and equities: Matching the sentiment, the total crypto market cap increased by 8.8%. Wall Street’s fear gauge VIX has cooled down to 38.57 from yesterday’s soaring 65.
  • U.S. economic activity expands: Purchasing managers reported a 51.4% expansion (up from 48.8%) in the services sector last month, which spurred some optimism for a soft landing.
  • Futures advance: Nasdaq 100 (+1.5%), STOXX 600 (+0.6%), showing initial signs of recovery after yesterday’s market turbulence.

For more information, read our full market update here.

How did BTC and ETH perform in previous bear markets?

Bitcoin is currently in the Extreme Fear zone, which shows that the asset is undervalued and may be an important  investment opportunity . The last time Bitcoin was in this territory, it was trading around $16K following the FTX crash, followed by a historical price rally, reaching multiple all-time highs.

Figure 1 – Bitcoin Fear & Greed Index

glassnode-studio_btc-fear-greed-index-alternative-me (1)

Source: Glassnode

‍

The two examples below, a macro-specific and crypto-specific event, led to the largest daily drawdowns of Bitcoin and Ethereum. These can be used to understand how their prices may move after yesterday’s events.

‍

Figure 2 – Bitcoin 3 Biggest Daily Drawdowns Since 2020

Screenshot 2024-08-06 at 13.11.21

Source: 21Shares

Figure 3 – Ethereum 3 Biggest Daily Drawdowns Since 2020

Screenshot 2024-08-06 at 13.11.36

Source: 21Shares

Screenshot 2024-08-06 at 13.38.41

Potential Scenarios for BTC / ETH

Below, we outline the macro-specific events that potentially affect Bitcoin and Ethereum’s recovery in the near future.

Screenshot 2024-08-06 at 13.53.46

* Short-term potential price movement

Important to note that past performance is not indicative of future results but can still serve as a useful reference point.

This Week's Calendar

august 6 2024_Calendar

‍

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof. All content provided by 21Shares is intended for informational and educational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Investments associated with crypto assets, such as cryptocurrencies and crypto tokens, involve risk. These assets are considered highly speculative due to their limited history and new technological nature. Future regulatory actions may impact the usability and tradability of crypto assets. The price of crypto assets can be influenced by a small number of holders and may decline in popularity or acceptance, affecting their value. For full disclosures, please visit our Disclaimers and Terms &Conditions pages.

‍

‍

Market Updates

See all

Weekly Newsletter

See all
Legal
Disclaimer
Privacy Policy
Terms of Use
Company
About Us
Careers
Contact
158 W 27th St,
New York,
NY 10011

© 2024 21Shares AG. All rights reserved.

21Shares is a part of

All content is original and has been researched and produced by 21Shares unless otherwise stated. No part of 21Shares' original content may be reproduced in any form, or referred to in any other publication, without the express written permission of 21Shares. The content is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect to any products or services for any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile, or residence.Some statements on this website may express future expectations and forward-looking views based on 21Shares' current assumptions. These statements may involve known and unknown risks and uncertainties, potentially leading to different results than those implied or expressed. All content is subject to change without notice. Further, there is no assurance that any strategies, methods, sectors, or any investment programs herein were or will prove to be profitable, or that any investment recommendations or decisions we make in the future will be profitable for any investor or client. Professional money management is not suitable for all investors. For full disclosures, please visit our Disclaimers and Terms & Conditions pages.