Bitcoin Maintains $20,000 Support Amid Market Volatility
Bitcoin (BTC) reclaimed and held $20,000 into Oct. 6, showing signs of resilience after the latest rebound punished short speculators. Data from Cointelegraph Markets Pro and TradingView showed BTC/USD bouncing from local lows of $19,740 on Bitstamp around the Oct. 5 Wall Street open.
Market Reaction and Short Liquidations
The trading pair reversed its prior losses, leading early shorters into $20 million in liquidations in just 24 hours. At the time of writing, Bitcoin traded around $20,250, having reached a daily high of $20,447.
Michaël van de Poppe, CEO and founder of trading firm Eight, flagged the lows as a suitable entry point, stating:
“Correction indeed taking place in which $19.8K-$19.9K is an area to look for longs, but also a retest around $19.6K is an important one for Bitcoin.”
Correlation With US Markets
As the U.S. dollar index (DXY) descended from its highs during the week, the relative weakness helped buoy the mood among risk assets. Popular trader Il Cap of Crypto predicted an upward move of approximately 3-6% across the market, but indicated that a decisive resistance level must hold to avoid a bearish turn.
“Expectation is 3-6% move up on the entire market. Some shitcoins might be the exception and have higher returns. We would then see a strong bearish move towards new lows,”
he explained.
Equity Market Insights
This shake-up in the crypto market coincides with expectations of a comedown for United States equities, given their close correlation with Bitcoin. Jurrien Timmer, director of global macro at Fidelity Investments, noted that the S&P 500 reading of 3,300 would represent “fair value.”
While S&P 500 had finished the Oct. 5 trading session at 3,783, Timmer stated:
“A major buy signal won’t happen until the Fed pivots or the market undershoots the fair value.”
Estimates from CME Group’s FedWatch Tool suggest that the November rate hike is more likely to match the previous two at 75 basis points.
Conclusion
Bitcoin’s recent performance illustrates its ability to maintain support levels amid market volatility, despite macroeconomic pressures. As fluctuation amounts rise and investors watch global economic indicators closely, traders remain positioned for potential breakouts in the coming days.
