Bitcoin and altcoins have been in a downtrend for a long time. BTC, which last experienced a sharp decline at the beginning of August, has been trying to hold onto the $60,000 level since then, but has not been successful.
While a recovery is expected in Bitcoin and altcoins, an updated assessment came from Grayscale Research.
Stating that August was quite volatile for the cryptocurrency market, Grayscale stated that Bitcoin benefited from the weakening dollar and interest rate cut signals amid market volatility.
According to the Grayscale report, Bitcoin outperformed while Ethereum (ETH) performed worse.
The report also stated that FED Chairman Powell signaled upcoming interest rate cuts that Bitcoin could benefit from at the Jackson Hole meeting towards the end of August.
“In our view, dollar weakness and low interest rates, if they continue, will be positive for Bitcoin's valuation.”
Ethereum Performed Less Well Than Bitcoin!
According to the report, Bitcoin fell moderately (-8.5%), while Ethereum fell by a larger amount (-21.8%) and was among the underperforming assets on a risk-adjusted basis.
It was evaluated that Ethereum's uncertain scaling strategy and a large number of speculative positions were effective in this decline.
“Ethereum significantly underperformed in the early August crash and failed to meaningfully recover later in the month.
Grayscale Research believes that current market pessimism about Ethereum is unjustified, given that the scaling strategy is clearly working. However, it may take some time for the market to become more positive for ETH.”
These Two Altcoins Are Shown As Examples!
Stating that some altcoins showed positive performance by positively decoupling from the market in August, Graysacale Research analysts cited ZCash (ZEC) and AAVE as examples of these altcoins.
“For example, ZCash (ZEC) gained 29.5% in mid-August before pulling back later in the month. AAVE gained 21%.”
The Great Selling Pressure in Bitcoin is Over!
Grayscale Research recently said that it believes the selling pressure from the German government, Mt. Gox refunds, and other events has largely passed and the price is likely to rise.
“Stable US labor market data, Fed rate cuts, and changing US policies around the crypto industry could allow Bitcoin price to retest all-time highs later this year.”
*This is not investment advice.