Bitcoin was attempting to recover from its 5% dip on October 1, and the community was eagerly anticipating the start of the “Uptober” bull run. However, BTC presented another shock with an additional 5.9% dip, sending the largest cryptocurrency to a low of $60,200. Is there a possibility of Bitcoin going down further? Let’s delve into the details.
What the Chart Says?
Before we explore the reasons behind this crash, let’s analyze the charts to understand what transpired. After significant struggle, Bitcoin managed to secure support above $65,500. However, intense selling pressure led to the formation of a consolidation zone. As the last day of the bearish month began and optimism took over, Bitcoin failed to sustain its position due to being overbought. This overconfidence among investors provided an opportunity for the bears to pull the market down.
As BTC fell from its support zone, panic set in, leading to a flurry of selling. The $62,800 zone offered some support and helped the price to bounce back. However, the $64,000 zone, now acting as active resistance, declined the price further. This pushed Bitcoin’s price down, receiving support from the 200-day moving average at $60,200. Besides these market dynamics, two non-market factors have significantly contributed to this fall.
Non-Market Ingredients of Bitcoin Crash
Jerome Powell’s Statement
The Chair of the Federal Reserve of the United States, Jerome Powell, mentioned on Monday that the Fed is looking to bring rates to neutral over time. He emphasized that policymakers are not currently planning significant rate cuts. This signal suggested that the Fed might not consider rate cuts in the upcoming Federal Meeting on November 6-7, 2024.
Israel-Iran Conflict
The ongoing conflict between Israel and Iran is not just destabilizing the Middle East but also impacting global markets. Such wars disrupt the smooth flow of markets across nations. Iran’s recent cruise missile attack on Israel caused significant damage, affecting both the nation and international markets.
Looking Ahead!
If you have been in the market for some time, you would know that wars impact both traditional and crypto markets significantly. The last major crash Bitcoin faced was due to Russia’s war against Ukraine, and now the Iran-Israel conflict is repeating history. Bitcoin has been attempting to recover from the recent crash, but it appears that more dips might be on the horizon. If conditions do not improve soon, Bitcoin might face a decline to $53,600 again. Investors and traders are advised to stay cautious.
