Bitcoin (BTC) and Ethereum (ETH) have recovered 21% and 18% respectively from their lows after the August 4 crash.
However, Aurélie Barthere, a senior research analyst at Nansen, told CryptoSlate that the worst may not be over yet. She explained:
“BTC (and ETH) have hit local lows, 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 the “Death Cross,” which typically precedes a price decline.
So, to avoid a bearish sign on his chart, the Nansen analyst explains that BTC needs to hold above the $62,000 price level. Still, the current all-time high zone between $70,000 and $71,000 still serves as a solid resistance threshold.
Barthere added:
“Psychologically, some traders were hit by the March and July sell-offs and this could be a very difficult threshold to cross.”
Meanwhile, ETH shows a strong correlation with BTC, especially during selloffs. The analyst points out that ETH has already posted a death cross on its daily chart and needs to hold above $2,700, which is a major resistance tested in January and this week.
Cryptocurrency market slowed by US elections
The sell-off in risk assets seen earlier this week is attributed to the unwinding of the yen carry trade, as the Bank of Japan (BOJ) cut interest rates too quickly.
Bitfinex analysts told the publication that the BOJ’s move would allow for a more gradual unwinding process, acting as a bailout for most leveraged traders, especially in the United States.
Therefore, the most important narrative impacting the cryptocurrency markets more than any other is the US election, according to analysts at Bitfinex.
Analysts added:
“As Democratic candidate Harris’s chances of victory have increased to almost match those of Republican candidate and former President Trump, this is creating uncertainty in markets, particularly cryptocurrencies.”
As of this writing, Harris and Trump are related at 49% odds on the Polymarket prediction market, with the Democratic candidate briefly exceeding the former US president earlier today.
According to analysts:
“The clear position that the market has shown based on recent events is that Trump’s victory is seen as a net positive for crypto and vice versa for Harris’ victory.”
While the current odds of Trump winning are at an all-time low, Bitfinex analysts expect the market rally to continue.
