Bitcoin, Ethereum, Dogecoin Slide As Middle East Tensions Escalate After Hezbollah’s Israel Attack: Trader Says Sentiment Will Remain Bullish As Long As King Crypto Stays Above This Level

Leading cryptocurrencies plunged Sunday as geopolitical tensions soared in the Middle East following Hezbollah’s missile attack on Israel.

What Happened: After moving sideways in the $60,000 zone for most of the weekend, Bitcoin began to retrace late in the afternoon. The leading cryptocurrency slipped below $59,000 as Hezbollah rained missiles on Israel after days of warnings and speculations over an imminent attack.

The second-largest cryptocurrency, Ethereum, also dipped below $2,600, though its pullback was less severe.

In the past 24 hours, 62,754 traders were liquidated, with the total liquidations at $161.83 million. About $124 million in bullish bets was wiped out. 

Bitcoin’s Open Interest fell nearly 3%. The drop in OI, coinciding with a drop in price, indicated the liquidation of bullish longs.

The market slipped back into the “Extreme Fear” mode, according to the Cryptocurrency Fear & Greed Index. This was a sign that investors were worried, potentially leading to a sell-off surge.

Top Gainers (24-Hours)

The global cryptocurrency market stood at $2.05 trillion, declining 3.75% in the last 24 hours.

Stock futures edged lower Sunday evening. The Dow Jones Industrial Average Futures dropped 50 points, or 0.12%, as of 8:45 p.m. EDT.  Futures tied to the S&P 500 dipped 0.08%, while Nasdaq 100 Futures slid 0.01%.

The market hoped to recover from last week’s downturn, precipitated by the unwinding of the Japanese yen “carry trade and fears of a slowdown in economic activity.

Investors would monitor key inflation-related data this week, as July’s producer price index and consumer price index were slated to be released.

According to CME’s FedWatch tool, traders have priced in a 51% probability of the Federal Reserve lowering the interest rate during September’s FOMC meeting.

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Analyst Notes: Widely-followed cryptocurrency analyst Captain Rational stated that Bitcoin was still at a premium despite its downswings over the last week.

“All narratives in shambles, Bitcoin would be called a crash hitting 39,000, but anything above 38,000 is bullish from a 200-week moving average standpoint,” the trader stated.

Another market analyst, Trader Fred, noted a “death cross” on Bitcoin’s daily chart. 

For the uninitiated, technical analysts view the death cross as a measure of recent price weakness. 

“That’s not good but let’s not deny the possibility of it being a fake out,” the trader cautioned. 

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