Bitcoin Price Slides Below $70,000: These Are The Key Reasons
01 Novembre 2024 - 3:00PM
NEWSBTC
The Bitcoin (BTC) price has experienced a significant downturn over
the past 24 hours, falling below the critical $70,000 threshold.
After reaching a peak of $73,620 on Tuesday, the cryptocurrency has
declined by approximately 5.7%, hitting a low of $68,830 on Friday.
Analysts point to several key factors behind this decline: #1
Risk-Off Sentiment Ahead of US Election The timing of Bitcoin’s
price drop coincides with a narrowing lead for former President
Donald Trump over Democratic candidate Vice President Kamala Harris
in prediction markets such as Polymarket and Kalshi, where users
bet on election outcomes. Bitcoin has been considered a “Trump
hedge” due to the former president’s strong advocacy for the
cryptocurrency sector. Donald Trump has proposed establishing a
“strategic Bitcoin reserve” in the United States if re-elected.
Speaking at the Bitcoin 2024 Conference, he outlined plans to
retain all Bitcoin currently held or acquired by the US government
as part of this reserve. This initiative is a core element of his
campaign to strengthen the US as a leader, aiming to make the
country the “crypto capital of the planet.” Related Reading: Can
Bitcoin Hit $200,000 Only If The Dollar Falls? Bitwise CIO Answers
Earlier in the week, when Trump’s lead over Harris was more
substantial, Bitcoin neared its all-time high of $73,777. The
shrinking of Trump’s lead appears to have prompted investors to
adopt a risk-off stance, contributing to the price decline. Crypto
analyst HornHairs noted that derisking before elections has
precedent. “Derisking into the election 5-6 days before it takes
place happened in both 2020 and 2016. Price then went on to never
retest the lows set the week before the election ever again. Be
careful what you sell here,” he remarked via X. #2 S&P 500
Loses 3-Month Trendline The correlation between Bitcoin and
traditional financial markets may have also influenced BTC’s price
movement. The S&P 500 has fallen to its lowest level since
October 9, potentially affecting investor sentiment in the crypto
space. Analysts from The Kobeissi Letter observed that despite
major tech companies like Apple reporting strong earnings, their
stock prices have declined. “Yet another tech giant to beat
earnings but trade lower,” they noted, adding that technology
stocks faced widespread selling even as Meta, Amazon, and Apple
exceeded earnings expectations. They added, It appears that markets
are de-risking ahead of the election next week. Brace for
volatility.” Related Reading: BlackRock’s Bitcoin ETF Reaches 2% Of
Total BTC Supply Amid Record Inflows Crypto trader Marco Johanning
highlighted concerns about the S&P 500 losing its three-month
trendline. “Given that the S&P 500 lost the 3-months trendline
yesterday, it looks more like a potential selloff before the US
election on Tuesday and lower prices in the short term. The perfect
bounce level is the 7-month trendline (blue). I don’t want to see
prices below the POC/key level around 63k (red),” he wrote via X.
#3 Leverage Flush Out A significant unwinding of leveraged
positions in the markets has also contributed to Bitcoin’s price
decline. The market correction appears to be a healthy response to
an overextension driven by leverage. Renowned crypto analyst Miles
Deutscher noted: “This pullback is normal (and expected). Market
was looking overextended the last few days, and largely driven by
leverage. Still not buying heavy as it isn’t a full cascade
yet—will wait for one of those days around the election. Not a bad
DCA day for certain coins tho.” Austin Reid, Global Head of Revenue
& Business at crypto prime brokerage firm FalconX, pointed out
that the crypto derivatives market was “on fire” ahead of the
election, with futures open interest for BTC, ETH, and SOL crossing
the $50 billion mark for the first time. On-chain analyst Axel
Adler Jr reported that open interest was reduced by $2.1 billion,
implying a significant leverage flush out. According to data from
Coinglass, over the past 24 hours, 93,864 traders were liquidated,
with total liquidations amounting to $286.73 million. The largest
single liquidation order occurred on Binance’s BTCUSDT pair, valued
at $11.26 million. For Bitcoin alone, $81.38 million in long
positions were liquidated—the largest amount since October 1. At
press time, BTC traded at $69,446. Featured image created with
DALL.E, chart from TradingView.com
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