Renowned cryptocurrency analyst Alex Krüger pointed out that the recent decline in the crypto market resembles the sharp downturn experienced last August. In his assessment, he explains the causes of the fluctuations and possible future developments.
Causes of Market Decline
Krüger claims that the current sharp corrective move was driven by a combination of macroeconomic factors and negative news from the crypto space. He recalled the August 2024 decline when the Bank of Japan's interest rate hike triggered market panic. The analyst noted that similar dynamics prevail today, including the impact of a hawkish Fed and high consumer expenditure inflation.
Current Situation in the Crypto Space
Krüger addressed recent developments in the crypto market, such as Coinbase's weak balance sheet and the potential shutdown of MicroStrategy's share sales. These factors are increasing market pressure. Nevertheless, he viewed the SEC's "Project Crypto" initiative positively, as it aims to bring securities laws on-chain, which may lead to improvements in the long run.
Market Outlook
According to Krüger, the market has either already bottomed out after the latest decline, or a bottom will form on Monday alongside the stock market. He believes that important events such as the Jackson Hole meeting and a potential rate cut by the Fed in September will play a significant role. He also expressed optimism regarding the medium-term outlook for the crypto market, expecting that a shift toward a dovish Fed policy and increasing crypto adoption will support market growth.
Alex Krüger summarizes that the current market decline is influenced by several factors and resembles last year's correction. However, he remains hopeful about a recovery in the crypto market in the medium term.
