Bitcoin And Ether Fall Faster – Time To Panic Or Buying Opportunity?

There is always a perfect Simpsons meme for every life situation. That has over the years become a law of nature. As we see Bitcoin and Ether fall ever faster with the greatest digital coin once again nearing it’s two-year low, the classic new reader Kent Brockman’s question to an undefined professor (the clip has been repeated in several episodes) seems to be a perfect fit.

Brockman: professor, would you say it’s time for everyone to panic?

Trading volume

In order to ascertain whether or not this is a buying opportunity or a moment to panic (even though this is never a state any investor wants to find himself in), let’s look at the circumstances. The global economy and stock markets have once again seen a selloff in recent weeks as the West realized summer is over and the Fed (as well as the ECB) will be forced to raise interest rates further in order to tame inflation.

The Federal Reserve will decide on Wednesday. As interest rates rise, fixed-rate investments become more attractive, while volatile and riskier assets such as cryptocurrencies lose the appetite of institutional investors. The British central bank is also expected to raise interest rates this week.

However, when it comes to Bitcoin, it was noticeable that trading volume was up on Monday versus the weekend, meaning that although the coin is going down, there are also traders that see a buying opportunity.

Outperforming

Joe DiPasquale, CEO of crypto fund manager BitBull Capital summarized that:

We can see that BTC’s relief rally was indeed unsustainable, and it gave up a lot of its gains after the CPI data came out higher than expected and the ETH Merge turned out to be a sell-the-news event.

(A buy the rumour sell the news event means that traders buy a security before the actual even, making the price go up, only to sell it after the event has happened).

Still, the overall direction is down, with Matthew Dibb, COO and co-founder of Singapore-based Stack Funds explaining to Reuters that:

Looking at the landscape right now, both fundamentally and technically, it’s not looking great. There’s no immediate bullish catalyst that we can see that’s going to prop up these markets and bring in a whole lot of new money and liquidity. We could see ETH testing yearly lows in the coming months.

According to Dibb, the reason for all this negativity is simple.

The appreciation in the dollar index is all we really need to look at to understand the sentiment in the risk assets… and it doesn’t look good

He stated.

I see a lot of Bitcoiners celebrating the drop of Ethereum price.

Ok, fine, have at it.

But ETH is still trading 50% above it's lows, while Bitcoin is less than $1,000 above the June price, a few percent.

ETH is wildly outperforming still.

— The Wolf Of All Streets (@scottmelker) September 19, 2022

Then again, some reflection might also be needed. With known crypto analist Scott Melker, tweeting under the moniker Wolf of All Streets, stating:

I see a lot of Bitcoiners celebrating the drop of Ethereum price. Ok, fine, have at it. But ETH is still trading 50% above it’s lows, while Bitcoin is less than $1,000 above the June price, a few percent.

ETH is wildly outperforming still.

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