Investors don’t have much time left. In just 8 days, there is expected to be a showdown between Bitcoin and Ethereum. Why is this happening, and how can investors best position themselves in the cryptocurrency market?
On the evening of Wednesday, September 18th, the situation will become serious. The future of cryptocurrencies could hinge on the interest rate decision made by the U.S. Federal Reserve (FED). Here’s what investors need to keep in mind regarding Bitcoin and Ethereum.
Bitcoin and Ethereum: Only 8 Days to Go
Over the past few weeks and months, both Bitcoin and especially Ethereum have been caught in a downward trend. While Bitcoin has been following a more structured downward trend since March 14th, which looks more like a calm correction, Ethereum and other altcoins have suffered significantly. This isn’t surprising, as altcoins often underperform when Bitcoin, the number one cryptocurrency, is in a downtrend. If Bitcoin drops below its 200-day moving average, this trend tends to accelerate further.
All eyes are now on the upcoming interest rate decisions from central banks. This Thursday afternoon, the European Central Bank (ECB) is expected to lower its interest rates, and next Wednesday, it will be the FED’s turn. It is likely that the FED will also reduce rates by 0.25 percentage points, initiating a rate-cutting cycle. Cryptocurrencies are expected to benefit from falling interest rates because assets that don’t generate cash flow, and are considered riskier, tend to become more attractive under such conditions.
How Investors Should Position Themselves in Cryptocurrencies Now
As long as Bitcoin remains below its 200-day moving average (see the chart from Tradingview below), investors should primarily focus on Bitcoin while exercising caution with altcoins and Ethereum. Especially since Bitcoin’s dominance (the share of the total cryptocurrency market that Bitcoin represents) continues to rise. Investors should only shift towards Ethereum and other altcoins once this dominance starts to decline again.
In the coming days, investors will still have time to make additional purchases of Bitcoin and Ethereum. Generally, cryptocurrencies are expected to rise again with lower interest rates and increased market liquidity. However, it won’t be a one-way street, as the past few weeks have shown. Cryptocurrency investors should also be prepared for the possibility that, despite positive prospects, prices may still drop within the next 8 days. A gradual approach to entering the market is advisable, and choosing a reputable broker from BÖRSE ONLINE’s crypto platform comparison can help. For those looking to diversify more broadly by investing in 10 coins at once, the BÖRSE ONLINE Best of Crypto Index offers this option. Alongside Bitcoin and Ethereum, this index includes many altcoins, which are expected to perform well during the next rally.
Investors now have 8 days left to reposition themselves. After that, Bitcoin is expected to aim for the $85,000 mark, as long as the trend channel doesn’t break downward. Ethereum’s path is a bit longer, with the next target being the $4,100 mark.
