- Bitcoin is down 6% on the day.
- Macroeconomic headwinds and ETF outflows threaten to deepen the correction.
- Continued volatility expected in the global economy.
Crypto markets sank again Friday morning, with $1.2 billion in leveraged positions liquidated.
Bitcoin exchange-traded funds saw outflows of more than $500 million the day before, while Binance users withdrew $185 million from the exchange.
“Bitcoin’s recent decline is largely due to macro stress,” said Illia Otychenko, senior analyst at the CEX.IO exchange. DL News.
Global trade tensions, the US government shutdown in Washington and continued outflows from Bitcoin ETFs have all created a “risk-free” environment, he said.
The next critical level of psychological support is $100,000, according to Otychenko.
“If this holds, we could see a stabilization; if it breaks down, the market may need more time to regain momentum.”
Still others expressed optimism based on fundamentals.
The long term vision
Despite this week’s selloffs and price swings, “there is strong conviction in Bitcoin as a utility asset, not just a store of value,” said Dom Harz, co-founder of the BOB blockchain. DL News.
Short-term price action has no impact on Bitcoin’s direction of movement, according to Harz.
“We will likely see Bitcoin evolve further in tandem with other financial markets as it moves closer to becoming a critical part of the global financial system,” he said.
Brinkism
Last week, analysts at Citrini Research warned that Trump’s trade strategy would remain a key source of volatility for broader markets.
“Trump will repeatedly bring us to the brink – gradually increasing trade tensions, but using shiny objects and promises of de-escalation or stimulus to try to avoid collapse,” Citrini Research said in a note to investors.
At the same time, traders are looking forward to the next policy meeting of the US Federal Reserve on October 29.
The CME Group’s FedWatch tool gives a 97% chance of a 0.25% rate cut, which would inject more liquidity into the financial system.
Crypto market players
- Bitcoin is down 6.5% over the past 24 hours to trade at $104,085.
- Ethereum is down 9% in the last 24 hours, trading at $3,697.
What we read
Lance Datskoluo is DL News’ European markets correspondent. Do you have any advice? E-mail lance@dlnews.com.
