It Turns Out That Most Of The Cryptos Are Recording Double-Digit Weekly Losses, Which Erased All Of Their Gains So Far

The crypto sector took an unexpected plunge on Friday, August 19, in contrast to what it seemed to be an accumulation race for the biggest players in the crypto space.

Bitcoin, as a crypto leader and trendsetter, is usually the culprit in such price swings, and this time makes no difference. The largest crypto to date recorded a fifth consecutive day in the red over the past six trading sessions in a continued retreat towards a key technical level.

Indeed, the price of Bitcoin fell through the 200-week moving average, which sits at around $23,000 and currently trades at $21,441.30 per BTC.

“The rally that brought it back to $25,000 has lost considerable momentum and that could begin to weigh more heavily on the price [of Bitcoin],” Craig Erlam, senior market analyst at Oanda noted.

Oanda’s opinion has been echoed by several other market analysts, which all consider the bullish run is over and Bitcoin is correcting. Ethereum, as well as the other top-tier crypto projects, also felt the pressure, losing as much as 15% over their prices over the past week. However, the exact reason for the crash is still in debate, as some crypto experts tie the drop with Federal Reserve rate hikes and ultra-high inflation.

"It’s not showing the pattern of a flash crash, as the assets didn’t immediately rebound sharply but sank even lower in the hours that followed," Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown added, stressing that speculating in cryptocurrencies is extremely high risk and is not suitable for the vast majority of people.

A temporary drop?

Meanwhile, Jurien Timmer, a top executive at financial services giant Fidelity Investments believes that Bitcoin (BTC) is currently a bargain. According to Timmer, if the thesis of Bitcoin’s network growth is set to continue, the flagship crypto asset is looking “cheap”.

“If you believe in Bitcoin’s adoption-curve thesis (i.e. that the network will continue to expand in line with previous S-curves), then it’s reasonable to view Bitcoin as cheap at these levels,” Timmer noted.

The macro expert also suggested that when comparing Bitcoin’s adoption curve next to those of the mobile phones or the Internet, Bitcoin is still below its actual and projected network growth curve. Furthermore, Timmer believes Bitcoin was massively oversold in the past dips.

“If Bitcoin is gold’s precocious younger sibling, it makes sense to look at Bitcoin priced in gold (i.e., Bitcoin’s beta to gold). Technically, the recent sell-off produced the biggest oversold condition in years (measured as the number of standard deviations from trend).” Timmer concluded.

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