Key Points
- Bitcoin’s price is weakening as investors move to the gold market amidst the Middle East crisis.
- The total crypto market cap has declined by 5.4 percent, leading to a liquidation of over $526 million.
Bitcoin’s price has started October on a bearish note, witnessing a decline of over 3 percent to trade at around $61,729. This drop happened during the mid-London session on Wednesday. The leading cryptocurrency has now slipped below the 200-day Moving Average (MA), indicating that bears are slowly gaining control despite the bullish rebound in September.
The altcoin market has followed the Bitcoin price drop, resulting in a 5.4 percent decrease in the total cryptocurrency market cap. This decline has led to the liquidation of over $526 million from the crypto-leveraged market, with long traders accounting for more than 85 percent.
Why Did Bitcoin’s Price Drop?
The cryptocurrency market witnessed significant losses following Iran’s attack on Israel with long-range ballistic weapons. Investors have been moving their assets to what are perceived as global safe havens, such as gold.
The US spot BTC ETFs saw the highest cash outflows since early September on Tuesday, amounting to around $242 million. Fidelity’s FBTC saw the highest cash outflow of about $144.67 million, closely followed by ARK 21Shares Bitcoin ETF (ARKB) with approximately $84 million.
However, BlackRock’s IBIT continued its Bitcoin accumulation with a net cash inflow of around $40.84 million. More than 5.9k Bitcoins, worth over $365 million, were deposited in the Binance Holdings exchange alone in the last 24 hours. It’s worth noting that more investors are taking advantage of the current Bitcoin price dip to accumulate more coins. Over 61 percent of traders on the Binance exchange have entered long positions on Bitcoin in the past 24 hours.
The Larger Market Scenario
Bitcoin’s price has been trapped in a bearish consolidation since March, despite notable accumulation from the US spot BTC ETFs. According to analyst Peter Brandt, Bitcoin’s price should be considered in a macro falling trend unless it consistently closes above $71k in the near term.
Despite Bitcoin’s price lagging behind the recent gold bull run, Wall Street analysts predict a major crypto upheaval is on the horizon. Additionally, the US Federal Reserve has indicated more interest rate cuts as inflation gradually decreases with a low unemployment rate.
The upcoming 2024 US general election will play a significant role in the overall crypto bull run, which is expected to extend into 2025.
