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The latest Bitcoin price dip, which pushed the king of crypto from the lofty $70,000 level on Monday to $66,000 on Wednesday, is associated with the ongoing Wall Street selloff. The biggest decline in recent times has hit the cryptocurrency market hard, triggering a similar downward trend in the altcoin market.
According to the latest market statistics, only stablecoins were spared the slaughter, which saw BTC slide downwards 2.3% as ETH lost 5.3%. The cryptocurrency market shared in a significant downturn, with all 20 leading cryptocurrencies in market cap seeing a decline, which saw Ethereum fall back to $2500. Bitcoin faced an uphill task, dropping to as low as $65,637 at some point, which triggered a ripple effect that traversed the altcoin market.
Reduce Exposure Due to Anticipated Volatility.
Financial markets as a whole are reeling from Wednesday’s unprecedented stock market selloff, following what experts believe are doubts surrounding future Federal Reserve rate cuts in investors’ minds. Pundits believe that most traders in the money markets may have decided to reduce their exposure owing to the anticipated volatility as we near next month’s US elections. The ongoing Bitcoin price dip suggests that all cryptocurrencies are tied at the hip, meaning that altcoins will almost always face challenges due to the pressure associated with BTC’s market dominance.
Wednesday’s stock market selloff saw the 10-year Treasury yield surge 4.25%, a level on the macroeconomic front that was last experienced last July, occasioned by a string of economic indicators and worries around the national deficit. Analysts at Secure Digital Markets opined that the “US Dollar Index escalated to a year-high” and piled further pressure on risk assets such as Bitcoin and other cryptocurrencies. Moreover, the analysts opined that the current market sentiments carried heavy political overtones based on who people believed would be elected President of the United States. Donald Trump, an active player in the cryptocurrency sector, is seen by many positive traders, while others approach Democratic Party candidate Kamal Harris with a more cautious approach.
Market a Little Hot for Bitcoin
It should be remembered that over the past few weeks, BTC has been smarting from an 18% price rally that saw it climb from $58,845 on October 9 to a high of $69,495 on Monday, October 14, which led to many experts predicting an upcoming pullback and consolidation period. Analysts Copper Research suggested that on-chain metrics showed that the market had run a little hot as Bitcoin headed toward the $70,000 mark. The analysts stated that a “short-term top is the more likely scenario for now despite upbeat ETF inflows.”
Statistics indicate that prior to the current Bitcoin price dip, institutional investors had strategically placed themselves to take full advantage, with data from Coinglass ETF showing an inflow of over $297.6 million on the US spot ETFs. That marked the seventh consecutive day of huge inflows, mainly fueled by BlackRock funds amounting to over $332.3 million. Should the trend have continued, pundits believed the actions on the ETF markets could have bolstered the price of Bitcoin in its push to surpass the $70,000 level, which now remains in limbo.
Conclusion
The latest Bitcoin price dip occasioned by a Wall Street selloff comes at a time when Bitcoin is facing continuous resistance surrounding the psychological $70,000 level following a 2.4% decline last Monday. The decline saw the king of crypto trade slightly below $67,000, suggesting that Bitcoin could end up resetting the psychological support level at $66,000. With the coin’s Relative Strength Index (RSI) showing trades at 60 and pointing downwards due to the overbought level of 70, experts predict a weakness in the anticipated bullish movement. There’s even fear that should the Bitcoin price dip continue, it could close below the neutral level of 50 and cause a further sharp decline in BTC’s price.
