Bitcoin Plunges Again: When Will It Stop?
From Bitcoin (BTC) to stocks and gold, asset prices struggled to hold steady in early trading on Thursday as investors grew uneasy due to escalating tensions in the Middle East, while their attention also focused on the highly anticipated September jobs report on Friday.
The key lies in any new signs of labor market weakness, which could prompt the Federal Reserve to announce another 50 basis point rate cut, although a 25 basis point cut is widely expected in November. According to the Chicago Mercantile Exchange's FedWatch tool, there is a 68% chance of a 25 basis point rate cut at the next Federal Open Market Committee meeting.
Data provided by TradingView shows that after rebounding to $61,500 overnight, Bitcoin bears are once again eyeing the $60,000 support level, while bulls are doing their utmost to hold the line.
FxPro Senior Market Analyst Alex Kupcsikevich noted: "The cryptocurrency market has lost another 1.44% of its capital in 24 hours, reaching $2.13 trillion." "The pressure is due to the medium-term impact of the Middle East conflict and short-term profit-taking ahead of the release of the US jobs report, leading to a continued rise in the US dollar and a decline in risk assets. The sentiment index has returned to the fear zone, falling to 37, a two-week low."
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He added: "Bitcoin found support as it fell towards the 50-day moving average and the $60,000 area." "Volatility in the $60,000-$63,600 range over the next two days could mislead market noise as the market awaits new information."
One token that has been more volatile than most in recent days is XRP. Initially, the community was excited and the token rose after Bitwise announced the submission of the first spot XRP exchange-traded fund (ETF) application to the US Securities and Exchange Commission (SEC). However, the mood quickly turned sour after the SEC announced its decision to appeal the recent lawsuit against Ripple, the issuer of XRP.
Kupcsikevich said: "XRP has fallen about 20% in four days and has failed to find support." "Despite the news of the ETF application, the coin has fallen from the upper limit to the lower limit of the trading range. On Wednesday, it broke through the 50-day and 200-day moving averages in one fell swoop, falling back below $0.53. A break through the range and confirmation below $0.50 could trigger a drop to $0.40."
Overall, the cryptocurrency market has had a tough start to October, and some in the community are now distributing memes, requesting to rename "Uptober" to "Rektober" as holders see the value of their portfolios decline.
Bitfinex derivatives director Jag Kooner said in a report: "The significant stagnation in spot buying behavior for BTC, coupled with the outflow of BTC ETFs, is one of the key reasons for the current decline in Bitcoin prices."
He added: "Although there may be a decline of 8-10% in the first half of October, we still expect to end the month neutral to positive, depending on when the uncertainty of geopolitical conditions eases."Kooner stated: "Over the past four months, the correlation between BTC prices and stocks has only increased. We see this trend continuing, with BTC behaving like a tail-risk asset." "Meanwhile, the correlation with safe-haven assets such as gold may decrease, especially if global economic and geopolitical conditions deteriorate."
As for short-term expectations, market analyst Justin Bennett said he "expects demand for BTC at $59,000, but a long-term liquidation price at $57,000, so we might see #Bitcoin occupying this liquidity before it rebounds."
Currently, Bitcoin is trading at $60,103, down 2.07% on the 24-hour chart.
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