silhouette form of bear on financial stock market graph represent stock market crash or down trend investment
Bitcoin has recently fallen to a low of $56.7K, while Ethereum has dropped to $3.1K, prompting many traders to see this as a “buy the dip” opportunity.
However, the best strategy might be to wait until the initial rush subsides. The ideal time to buy is when the market sentiment shifts to impatience and skepticism.
Today, Ethereum has declined by over 5%, currently trading at $3,126. This downturn puts a significant whale, who has a long position in Ethereum, at risk of liquidation.
This whale deposited 12,734 ETH (around $40 million) into Compound and borrowed $31.4 million in stablecoins, with a precarious health rate of just 1.06. If Ethereum’s price drops to $2,984, this position will be forcibly liquidated.
Despite the crypto market sell-off, the options market remains optimistic. There is still significant interest in ETH call options for September and December expiries, indicating that traders are betting on a recovery.
Additionally, liquidation clusters for both Bitcoin and Ethereum are heavily skewed to the upside, which could lead to potential short squeezes. The approval of S-1 forms is also on the horizon, which could result in a sharp rebound in Ethereum’s price.
The current sentiment suggests a cautious approach. With Ethereum nearing critical levels that could trigger liquidations, and the market showing early signs of buying the dip, it may be wise to wait for a more stable entry point. Strategic timing is crucial, especially as the market navigates these volatile conditions.
In summary, while the recent declines in Bitcoin and Ethereum present potential buy opportunities, patience and careful observation are essential. The ongoing market dynamics, particularly around key liquidation levels and options market interest, will significantly influence price movements in the coming days.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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