Bitcoin, Ethereum, Dogecoin Sink Again: King Crypto On Cusp Of Downside Breakout If $56K Is Lost, Says Analyst

Leading cryptocurrencies sank further Sunday, erasing gains made from the relief rally in the days prior.

What Happened: Bitcoin fell below $56,000 again, following an optimistic rally that saw the digital asset rise well beyond $58,000 the night before.

The second-largest cryptocurrency, Ethereum, also dropped below $3,000 after a temporary respite. 

The market has been under stress, exacerbated in part by planned Bitcoin sell-offs by defunct cryptocurrency exchange Mt.Gox this month as part of its repayment obligations to its creditors, and potential sales by the German government. 

The slump in the last 24 hours caused $202 million in liquidations, with $171 million in long bullish bets getting wiped out.

Bitcoin’s Open Interest dropped 4.67% in the last 24 hours. A fall in OI, complemented by a fall in price, indicated the capitulation of long positions, igniting hopes of a bullish recovery. 

The Cryptocurrency Fear & Greed Index continued to be engulfed in “Fear.” The reading of 28 at the time of writing is the lowest since Jan. 2023, the aftermath of the FTX collapse. 

Top Gainers (24-Hours)

The global cryptocurrency market cap stands at $2.04 trillion, following a 4.51% drop in the last 24 hours.

Stock futures traded lower Sunday night. The Dow Jones Industrial Average Futures slipped 0.14% as of 8:30 p.m. EDT.  Futures tied to the S&P 500 fell 0.14%, while Nasdaq 100 Futures were also down 0.14%.

This week, investors will seek cues from key inflation data, such as the consumer price index and producer price index, to predict the Federal Reserve’s next steps. According to CME FedWatch, investors anticipate an interest rate cut during September’s FOMC meeting. 

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Analyst Notes: Widely followed cryptocurrency analyst Rekt Capital sounded a possibility of Bitcoin breaking to the downside from its four-month-long range if it fails to close above $56,750.  

Another popular trader Kevin ruled out the possibility of an imminent altcoin rally owing to Bitcoin’s negative momentum.

“BTC dominance will not top until BTC has been in high conviction price discovery for 30-45 days. Happens way every cycle. Somewhere in the low to mid 60’s percent is my guess,” the trader asserted. 

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