Bitcoin’s Price Action Post-Wall Street Open
Bitcoin (BTC) experienced a cooling phase over the weekend, resting near $19,200 following the Wall Street open on October 14. This stagnation comes as stock markets grapple with maintaining a temporary relief rally dubbed a “bear trap.” BTC/USD had previously climbed dramatically, hitting one-week highs, but has since retraced as broader market dynamics shifted.
Market Sentiment and Volatility
Traders witnessed intense volatility as the release of U.S. economic data led to significant liquidations worth hundreds of millions of dollars across both long and short positions. Despite an approximately $2,000 uptick in just 24 hours, Bitcoin began to lose momentum as the S&P 500 fell by 1.9%, and the Nasdaq Composite Index faced a steeper decline of 5.4%.
External Factors Influencing Bitcoin
Alasdair Macleod, head of research at Goldmoney, emphasized the pressure on financial assets due to surging long-dated U.S. bond yields. He commented, “US Treasury bond yields continue to soar. So long as this is the case, abandon all hope for financial asset values.” Additionally, the U.S. dollar index (DXY) made notable progress during the day, surpassing 113.4 before stabilizing.
Market Expectations Ahead of Fed Decisions
The recent CPI print for September significantly impacted sentiment, leading to widespread expectations of a further 75-basis-point interest rate hike by the Federal Reserve in November. According to the CME Group’s FedWatch Tool, the probability of a lower 50-point hike stood at a mere 2.1% as of October 14.
Bearish Outlook for Bitcoin
Amidst this turmoil, Bitcoin analysts are leaning towards a bearish outlook for the short term. Il Capo of Crypto posits that a rise to around $21,000 could precede another drop, while trader Jibon (Trader_J) expects highs to exhaust at or above $20,000 before a decline towards $18,000. Michaël van de Poppe, CEO of trading firm Eight, highlighted that sustaining the spot price around $19.4K is crucial for potential further gains.
Conclusion: Awaiting Market Direction
As Bitcoin navigates the current market landscape, traders and investors are keeping a close watch on price action. The mix of macroeconomic influences and technical patterns will play a pivotal role in determining whether Bitcoin can sustain its levels or if further downside movements are imminent. A meticulous examination of these market indicators will be essential for traders looking to position themselves strategically in the upcoming turn of events.
