This sudden fall<\/a> has left many analysts and investors wondering about the future course of some of the top digital assets, hence underlining how volatile the market is wrought by macroeconomic events and changing mood among investors.<\/p>\n \ud83d\udcca Crypto’s latest retrace is coming after longs were pouring in on exchanges like @dYdX<\/a> at the highest rate since Bitcoin’s All-Time High craze in March. Greed suddenly came pouring in on August 25th, and liquidations happened swiftly. When funding rates get extreme in either\u2026 pic.twitter.com\/siXhAI46VQ<\/a><\/p>\n \u2014 Santiment (@santimentfeed) August 27, 2024<\/a><\/p><\/blockquote>\n Meanwhile, based on figures provided by Santiment, long positions have been transpiring at the fastest rate since Bitcoin’s peak in March, which is indicative of a spike in market optimism-or perhaps greed-around August 25th.<\/p>\n The wave of liquidations appeared to catch the cryptocurrency market by surprise, which fully ended its optimistic sentiment and led into a steep correction in typical fashion for the wild swings of crypto. Santiment says such sudden market shifts are often driven by excessive leverage, as when imbalanced funding rates herald an impending correction by way of the market resetting.<\/p>\n Likewise, speculations of US monetary policy are one of the key drivers for this recent change in price. Federal Reserve<\/a> Chairman Jerome Powell hinted at a probable interest rate cut this year in the last meeting, adding more fuel to speculation of more liquidity in the market.<\/p>\n Since there is a traditional weakening of the US dollar when interest rates are low, it makes cryptocurrencies more attractive to investors.<\/p>\n According to Ryan Lee, the chief analyst at Bitget Research, Bitcoin<\/a> may range between $54,000 and $72,000, while Ethereum<\/a> may range between $2,250 and $3,350 in September. But again, these are not without their own set of disclaimers since the market is always open to surprises which might change this trend.<\/p>\n Despite the declines, however, trading volume has jumped. Whereas an upsurge in trading volume could indicate panic selling by investors attempting to cut their losses, it might also be interpreted as quite the opposite – that investors feel bullish and are buying into what they perceive to be undervalued prices in anticipation of a market recovery.<\/p>\n For example, the trading volume<\/a> of Bitcoin exceeded $30.5 billion, a 30% rise. It also usually means that some traders are closing their positions while others are benefiting from the great discounted rates. The reaction of the market to this development will finally determine the direction<\/a> both Bitcoin and Ethereum travel.<\/p>\n\n
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<\/p>\nEconomic Factors At Play<\/strong><\/h2>\n
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Trading Volume And Market Activity<\/strong><\/h2>\n