Bitcoin, Ethereum, Dogecoin Tumble: Analysts Search For Crypto Bottom As Recession Fears Grip Markets

Zinger Key Points
  • Bitcoin, Ethereum, Dogecoin plunge alongside other risk assets
  • BTC and ETH near key psychological levels of $20,000 and $1,000, respectively
  • Crypto trader Justin Bennett gives out key level on daily chart for BTC capitulation

Bitcoin, Ethereum and other major coins traded sharply lower Thursday evening as the global cryptocurrency market cap fell 8.7% to $886.54 billion.

Price Performance Of Major Coins
Coin 24-hour 7-day Price
Bitcoin BTC/USD -8.9% -31.1% $20,538.49
Ethereum ETH/USD -12.4% -39% $1,080.24
Dogecoin DOGE/USD -8.9% -28.9% $0.055
Top 24-Hour Gainers (Data via CoinMarketCap)
Cryptocurrency 24-Hour % Change (+/-) Price
Neutrino USD (USDN) +2.3% $0.97
UNUS SED LEO (LEO) +1.1% $5.03
Pax Gold (PAXG) +0.75% ​​$1,875.13

See Also: How To Get Free Crypto

Why It Matters: Fears of an impending recession battered risk assets on Thursday with both cryptocurrencies and stocks diving into the red.

The S&P 500 and Nasdaq ended Thursday’s trading session 3.25% and 4.1% lower, respectively. At press time, S&P 500 and Nasdaq futures were up 0.3% and 0.5%, respectively.

This week’s U.S. rate hikes were followed by other central banks. The Swiss National Bank unexpectedly raised rates for the first time since 2007 on Thursday. The central bank raised its policy rate from negative 0.75% to negative 0.25%, reported Reuters.

Bank of England also raised interest rates by a quarter of a percentage point, although the rate hike was in line with expectations.

OANDA senior market analyst, Edward Moya, noted that U.S. economic data is signaling deceleration in activity prompting calls of recession from Wall Street. Moya pointed to the cooling of housing starts and building permits and surging mortgage costs as examples. 

“Traders went from expecting a soft landing to fearing an imminent recession.  Some consumers are already behaving as if we are already in a recession and that is a troubling sign for many of the S&P 500 companies,” said the analyst, in a note seen by Benzinga.

“Surging recession fears are crippling appetite for risky assets and that has crypto traders remaining cautious about buying Bitcoin at these lows,” said Moya.

Pseudonymous cryptocurrency analyst Kaleo pointed out that Bitcoin’s cyclical bottom was approximately 770-880 days after previous halvenings. The analyst said it's been 766 days since the last halving that took place on May 5 2020.  

Kaleo expounded on Bitcoin’s supply and demand dynamics and said the “effect of supply inflation on price steadily decreases with time, and almost seems to flatten out” in the thread.

Halving refers to reduction of mining rewards by 50% of the apex coin after each set of 210,000 blocks is mined.

Cryptocurrency trader Justin Bennett shared a BTC-USD price chart on Twitter and said if the apex coin takes out the trend line he drew and the $20,000 level, we could see capitulation. 

“Still another 15-25% to go IMO. That means at least another 30% lower for most altcoins,” said Bennett.

Santiment said the past week saw the most realized losses in Bitcoin transactions since data became available in 2009. The market intelligence platform said high high capitulation spikes can and will “eventually foreshadow bottoms.”

Read Next: Jeffrey Gundlach Correctly Predicted Bitcoin Would Retreat To $20K: Here's His Next Call On The Crypto

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