- Sanctiment’s platform speculates a “Buy in the Dip”.
- Jerome Powell’s strategy on inflation is supposed to have come down heavily on crypto prices.
- Traders suspect there could be another inflation under the hood.
“Buy the dip” investors cashed in on buying the dip when the crypto prices were down last week. However, there seems to be yet another “buy the dip” opportunity arising on the horizon.
With Bitcoin (BTC) crashing below $18,500 and Ethereum dropping below $1,300 last week, investors showed interest and bought the dip, according to Santiment, a social media trends in crypto-behavior analysis platform.
However, the graph suggests the boasting of “buy the dip” traders last week was short-lived as the crypto price index report brought prices of crypto further down.
Although there doesn’t seem to be a clear correlation between crypto price decrease, crypto price index, and inflation, it is believed that the chairman of the US Federal Reserve, Jerome Powell’s speech and strategy to curb inflation on August 26 could have caused major damage to toppling the crypto price.
In his speech, Powell said that while higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also cause some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
After Powell’s speech, the total market cap of all the cryptocurrencies fell over $50 billion from $1.04 trillion to $953 billion on August 26, according to data from CoinMarketCap. As of the time of writing, the total crypto market cap is at approximately $911 billion, the first time it is below $950 billion since February 2021.
Consequently, Bitcoin, the largest cryptocurrency by market cap, fell below $20,000. As of Monday, August 29, BTC was trading at $19,887. However, currently, BTC is trading at $18,730, with a decrease of 16.16% in 7 days and a drop of 6% in 24 hours.
Although Santiment’s platform depicts a “buy the dip” opportunity in the near future, traders are suspicious about whether there could be another inflation under the hood. Nonetheless, time will tell whether it will be bulls or bears that run the market.