August turned out to be the worst crypto month since November 2022

A cascade of liquidations at the end of August extended the summer decline in the crypto market, it says report titled “Moderate Expectations After Losing Bullish Ground in August” from the Cointelegraph Research team, writes RBC Crypto.

According to the study, in July the crypto market entered a summer decline that lasted until the first half of August. Sentiment turned bearish in the second half of the month as BTC suffered a cascade of liquidations that wiped out any gains made from the June ETF hype.

Analysts believe that August was the worst month for cryptocurrency markets since Bitcoin hit a local bottom last November (around $15,000). What many initially thought was just a summer slump turned into a pronounced decline: the derivatives market experienced a cascade of liquidations, resulting in a loss of 7.3% of the value of BTC and 6.9% of the value of Ether, the report said.

Grayscale’s victory in court only temporarily raised the Bitcoin price to $28 thousand at the end of August, after which the price of the asset fell again. This caused one of the largest cryptocurrency liquidations, with more than $1 billion lost as the price dropped to $26,000.

Analysts called another blow to the industry: a 42.7% decline in venture capital inflows in August compared to July: only $401.9 million across 77 deals. Investments in the crypto industry were growing until May of this year, but have been steadily declining since then.

Negative sentiment in BTC, according to researchers, is also due to derivatives: on August 25, $1.9 billion worth of monthly Bitcoin options expired, which caused serious speculation in the markets.

Analysts conclude that while the leading crypto asset’s price surge to $28K was short-lived, the silver lining for cryptocurrencies is that Bitcoin’s $26K price level is showing signs of market support.