Bitcoin Plunges to $58,000 on ‘Extreme Fear’; Possible September Gain Could Support Mining Stocks
Date: 2024-08-19 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
The leading cryptocurrency, Bitcoin (BTC), recently fell to around $58,000, a significant decline amid weakened buying interest. The total crypto market cap currently stands at $2.07 trillion, reflecting a decline of 0.47% over the past 24 hours.
This decline in Bitcoin’s value is mainly due to increased fear in the market, as evidenced by the decline in social activity and the rise in negative sentiment. These factors increased selling pressure, leading to further price declines.
However, this decline may be temporary. Forecasts point to a possible price increase by September. Additionally, strategic investments by mining companies like Marathon Digital, which recently acquired more BTC, could help restore confidence in the market and stabilize prices.
Bitcoin faces further declines amid ‘Extreme Fear’ and low social engagement
Bitcoin is currently in the ‘Extreme Fear’ phase, which is often accompanied by price declines. Bitcoin’s price recently fell 1.99% to $58,459, while the total market cap is $1.15 trillion.
Despite a 33.05% increase in trading volume to $19.33 billion, social volume, which tracks Bitcoin-related discussions on social media, has declined since mid-July.
The decline suggests a weakening of interest from the community, which is concerning since higher social volume usually correlates with higher prices.
The current decline in social activity, coupled with the Extreme Fear phase, may indicate a decline in investor engagement. If negative sentiment persists, it could lead to further price declines.
Overall, the combination of decreased social activity and Extreme Fear suggests a potential continuation of Bitcoin’s downtrend despite increased trading volume.
A Bitcoin Price Rise by September Could Lead to a Boost in Undervalued Mining Stocks
The current Bitcoin price consolidation may be ending soon. While Bitcoin recently tried and failed to break above $60,000, it is currently trading at $58,549.
Historically, Bitcoin prices often spike about 160 days after a block reward halving, which occurred 125 days ago, indicating a potential price rally by the end of September.
Despite the 30-50% decline in mining stocks like Marathon Digital and Riot Platforms this year, these stocks are now considered undervalued.
The decline is due in part to Bitcoin’s halving and its tight trading range. However, Marathon Digital’s recent purchase of 4,144 BTC suggests that large miners are preparing for future gains.
Analysts believe that if historical trends continue, these mining stocks could outperform Bitcoin in the next bull run.
As such, the potential end of Bitcoin’s consolidation, coupled with historical trends, points to a possible price rally by September, which could be a positive for undervalued mining stocks.
Bitcoin ETF Inflows Signal Possible September Gains, Support for Mining Stocks
Bitcoin ETFs recently saw significant inflows of $32.58 million, signaling renewed investor confidence. BlackRock’s Bitcoin ETF now leads the pack with $22 billion in assets, ahead of Grayscale’s $20.7 billion.
However, Ethereum ETFs have seen mixed results, with total outflows of $14.16 million. While BlackRock’s Ethereum ETF has attracted $76.35 million, Grayscale saw significant outflows of $118 million.
Bitcoin is currently trading at $58,566, while Ethereum is trading at $2,628. Historical trends suggest that Bitcoin could see a significant increase in price by the end of September, especially after the halving.
