The price of Bitcoin (BTC) plummeted from its July high of $31,500 and was hovering around $26,100 on Aug 28. In fact, the Bitcoin price dipped below $26,000 at one point on Monday amid a recent bearish sentiment among cryptocurrency traders.
Multiple reasons have been denting the sentiments of cryptocurrency traders, with no new catalyst to drive the markets. Monday’s decline follows Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Annual Policy Symposium. Powell, on Aug 25, maintained his hawkish stance, saying that inflation remains elevated from the Fed’s target level of 2% and more interest hikes would be required to pull it down.
Crypto Rally Comes to a Halt
Following Powell’s speech, all major cryptocurrencies like Bitcoin, Ethereum (ETH), Litecoin (LTC) and Dogecoin (DOGE) took a hit on Monday. Ethereum and Litecoin were hovering around $1,650 and $65, respectively.
Understandably, market participants are worried as they are yet to get a clear picture of how the Fed plans to go ahead with its interest rate hike campaign. Higher interest rates negatively impact growth-oriented assets, such as consumer discretionary and technology stocks, along with cryptocurrencies.
The sudden bearish sentiment among crypto traders comes after a solid rally in cryptocurrencies in the first half of the year. cryptocurrencies had an unimpressive 2022 owing to a series of unfortunate events like the bankruptcy of FTX, but the rebound this year has been solid.
The past month has seen a number of unfortunate events. Earlier this month, credit rating agency Moody’s downgraded several U.S. banks and kept half a dozen banks on review for potential downgrades.
Also, last week, S&P 500 Global Rating downgraded five regional banks. This has raised fears about the health of the country’s banks, bringing the crypto rally to a standstill.
However, experts still believe that the cryptocurrency market has immense potential and will rebound as the macroeconomic factors improve.
At present, it is recommended that investors consider accumulating cryptocurrencies through a buying-on-the-dip strategy. Each decline in cryptocurrency prices might offer a favorable chance to make purchases, potentially leading to substantial gains as the market’s volatility stabilizes.
Stocks to Watch
NVIDIA Corporation NVDA is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence and the mining or production of cryptocurrencies.
NVIDIA’s expected earnings growth rate for the current year is 145.2%. Shares of NVDA have gained 20.3% in the past three months. NVIDIA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Robinhood Markets, Inc. HOOD operates a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds, options, gold, and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies using its Robinhood Crypto platform.
Robinhood Markets expected earnings growth rate for the current year is 57.3%. Shares of HOOD have gained 19.6% in the past three months. Robinhood Markets currently has a Zacks Rank #2 (Buy).
HIVE Blockchain Technologies Ltd. HIVE operates as a cryptocurrency mining firm. The company validates transactions on blockchain networks, as well as provides crypto mining and builds bridges between crypto and traditional capital markets.
HIVE Blockchain’s expected earnings growth rate for the current year is 72.2%. Shares of HIVE have gained 15.8% in the past three months. HIVE presently carries a Zacks Rank #3 (Hold).
Accenture plc ACN is a worldwide system integrator that offers consulting, technology and various services. The company promotes Ethereum-based blockchain solutions to businesses, aiming to simplify payment processing.
Accenture’s expected earnings growth rate for the current year is 8.2%. Shares of ACN have gained 5.7% in the past three months. Accenture currently carries a Zacks Rank #3.
Coinbase Global, Inc. COIN offers financial infrastructure and technology to support the global cryptocurrency economy. COIN provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.
Coinbase Global’s expected earnings growth rate for the current year is 84.8%. Shares of COIN have increased 29.5% in the past three months. Coinbase currently has a Zacks Rank #3.
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