View on the Market
Crypto Market Volatility: A Dance of Dips, Peaks, and Potential
TLDR: In August, the crypto market saw a 15% dip and a notable rise due to Greyscale's legal victory against the SEC's ETF decision. While Bitcoin remains dominant, most alt coins haven't outperformed it. CommonSense views Bitcoin's current price between $25,000-$27,000 as a 'buy zone', but is ready for potential drops to $22,000. The company remains cautious yet sees this as a promising entry point for long-term investors. - Edu Forte, CEO of CommonSense.
During the month of August, we experienced a significant downturn in the crypto market, weighing in at a -15% month-to-month, with a sharp rise on the last day of August, which was quickly corrected two days later.
This exuberant rise of Bitcoin (and by extension, the rest of the crypto assets) was largely due to the news that Greyscale, the primary trust that many traditional investors use to gain exposure to Bitcoin, won an initial legal battle against the SEC, which did not authorize it to convert the trust into an ETF.
The battle between regulators and asset managers continues, and it will likely bring great volatility as good and bad news emerge.
Still, over the past 90 days, most of the major coins have not managed to outperform Bitcoin, indicating that investors remain primarily focused on the dominant market asset, with few major opportunities in 'alt coins', beyond a few outliers.
Top 50 Performance over the last season (90 days) - Source Blockchaincenter
From our perspective, we're comfortable with the current Bitcoin price, which we see as sitting in the 'buy zone'—specifically between $25,000 and $27,000. That said, we acknowledge the possibility of a sharp decline to the $22,000 range. Should this scenario unfold, we stand poised to deploy additional cash and capitalize on the opportunity.
At CommonSense, we continue to maintain a cautious outlook, but with one foot in the market while adjusting risk, to be prepared for rises, declines, or lateral movements in the upcoming month.
We strongly believe that this is a good market entry opportunity for investors with a long-term view.
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