The cryptocurrency market witnessed a significant downturn as Bitcoin (BTC) experienced a notable drop of approximately 4% in the past 24 hours. As of Friday, November 1, during the early European trading session, Bitcoin was valued around $69,532. This decline followed a promising rally earlier in the week that flirted with the coin’s all-time high. October concluded with Bitcoin priced at approximately $70,000, falling short of its highest monthly closure of about $71,297.
The altcoin market, spearheaded by Ethereum (ETH), mirrored Bitcoin’s corrective trajectory, resulting in a 5.2% reduction in the overall cryptocurrency market capitalization. This heightened volatility in the crypto landscape led to the liquidation of nearly $300 million, with approximately $247 million involving long positions. Let’s delve into the primary factors influencing Bitcoin’s price action today.
Major Factors that Affected Bitcoin Price Action Today
Notable Selloff from US Spot BTC ETFs
In the past 24 hours, Bitcoin’s price struggled to maintain its bullish momentum, as most U.S. spot BTC ETF issuers reported significant cash outflows. Despite BlackRock’s IBIT registering substantial inflows of approximately $318 million, other leading BTC ETF issuers faced substantial outflows. ARKB reported a notable outflow of $94 million, while Fidelity’s FBTC and Bitwise’s BITB each recorded outflows of $75 million. Consequently, U.S. spot BTC ETFs registered a net cash inflow of around $32 million, a stark contrast to the nearly $2 billion inflow observed in the preceding two days.
End-of-Month Options Expiry
Bitcoin’s price dynamics were also influenced by the expiration of $2 billion worth of options contracts on Friday, although this figure was smaller than the previous month’s expiration. Market data from Coinglass indicated that the Deribit exchange recorded an options volume of approximately $1.96 billion in the past 24 hours. Earlier in the week, Joshua Lim, the head of derivatives at Arbelos Markets, highlighted the significant volume of CME Bitcoin options, occurring just days before the U.S. election. Meanwhile, the Open Interest (OI) soared to $1.3 billion at a strike price of $80,000 on the Deribit exchange.
Uncertainty from High-Impact Events
The past few weeks saw Bitcoin’s price benefiting from a consistent upward trend, driven by robust demand from institutional investors. However, the emergence of short-term high-impact events has introduced uncertainties, deterring some investors due to anticipated volatility. This environment has prompted an acceleration in profit-taking behaviors, dampening the bullish market sentiment.
Notably, the crypto market is bracing for the potential victory of Republican presidential candidate Donald Trump in the 2024 elections. In addition, Wall Street analysts are forecasting another rate cut by the Federal Reserve in the upcoming week, further contributing to market uncertainties.
Developing Short-Term Bearish Technical Outlook
According to insights from crypto analyst Ali Martinez, Bitcoin’s price encountered significant resistance above the $73,000 mark, indicating that a brief correction was necessary to rejuvenate bullish sentiment. From a technical analysis perspective, Bitcoin is anticipated to establish a solid support level above $69,000, potentially setting the stage for the next rally towards $78,000 in the near term.
