Bitcoin (BTC) and Ethereum (ETH) Recovered 21% and 18%, Respectively, from Their Bottoms Registered After the Aug. 4 Crash.

By Gino Matos and Assad Jafri. Bitcoin (BTC) and Ethereum (ETH) recovered 21% and 18%, respectively, from their bottoms registered after the Aug. 4 crash.

Bitcoin (BTC) and Ethereum (ETH) have recovered 21% and 18%, respectively, from their bottoms following the Aug. 4 crash.

However, according to Aurelie Barthere, Principal Research Analyst at Nansen, the worst may not be over yet. She told CryptoSlate:

“BTC (and ETH) have hit local bottoms, but the daily trend still looks negative: the 50-day moving average is about to cross below the 200-day moving average.”

Barthere added that this creates the technical pattern known as “Death Cross,” which usually precedes a price downside.

Hence, to avoid a bearish sign on its chart, BTC needs to hold above the $62,000 price level, according to the Nansen analyst. But the current all-time high zone between $70,000 and $71,000 is still a strong threshold of resistance.

“Psychologically, a few traders have been hurt by the March and July sell-offs and this might be a very difficult threshold to cross,” Barthere added.

Meanwhile, ETH shows a strong correlation with BTC, especially during sell-offs. The analyst points out that ETH already displayed a Death Cross on its daily chart and needs to hold above $2,700, which is a significant resistance tested in January and this week.

US elections holding crypto market back

The massive sell-off in risk assets earlier this week is attributed to the unwinding of the Yen carry trade, as the Bank of Japan (BOJ) cutting interest rates too fast.

Bitfinex analysts shared with the publication that the move from the BOJ will allow a more gradual unwinding process, acting as a bailout for most leveraged traders, particularly in the U.S.

Hence, the most significant narrative impacting crypto markets more than any other is the US election, according to Bitfinex analysts.

“As Democrat nominee Harris has seen an increase in odds of winning to almost equal Republican nominee, former President Trump’s odds, it induces uncertainty in markets, especially crypto,” the analysts added.

At the time of writing, Harris and Trump are tied at 49% odds on the prediction market Polymarket, with the Democrat nominee briefly surpassing the former US president earlier today.

According to the analysts:

“The clear stance that the market has shown based on recent events is that Trump winning is being priced in as a net positive for crypto and vice versa for Harris winning.”

If Trump’s current odds of winning are at a bottom, Bitfinex analysts expect a market recovery to continue.

Mentioned in this articleGino MatosGino Matos is a law school graduate and a seasoned journalist with six years of experience in the crypto industry. His expertise primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).Assad JafriAJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

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