Bitcoin Drops Below $107K as XRP and ADA Suffer 17% Weekly Decline
Bitcoin experienced a notable price drop during the Asian trading session last Friday, descending below the $107,000 mark. This decline underscores ongoing macroeconomic uncertainties and liquidity challenges that are influencing the cryptocurrency market. Bitcoin’s slump is affecting other major cryptocurrencies as well. Both XRP and ADA have suffered significant losses, with each experiencing a 17% decline over the past week.
Enduring Market Pressure
The cryptocurrency market has faced persistent challenges, with Sunday and Monday’s attempted recovery failing to gain momentum. According to Alex Kuptsikevich, FxPro’s chief market analyst, the 50-day moving average has served as a temporary resistance point. Market activity is now focused on the 3-month support levels.
Altcoin Struggles
While Bitcoin faces declines, altcoins like Ethereum, BNB, Solana, and XRP have dropped between 5% and 7%. Dogecoin and Cardano’s ADA have fallen over 20% within the week, affected by diminished speculative interest. Traders are shifting their focus back to stablecoins in anticipation of upcoming Federal Reserve meetings and geopolitical developments.
Market Sentiment and Future Outlook
The current market sentiment reflects a cautious approach, with investors moving capital into Bitcoin and stablecoins. Analyst Wenny C., COO at SynFutures, highlighted that the thin order books have heightened volatility, but there is no indication of panic. Wenny emphasizes that the recent decline points more towards controlled deleveraging.
- Exchange open interest has diminished, reaching midyear lows.
- ETF inflows remain consistent, indicating long-term investor confidence.
Nassar Achkar from CoinW believes that a cleansing of leverage could lay the groundwork for a stable market base. Resilient ETF inflows and continued accumulation by large investors are seen as stabilizing factors.
Anticipation Ahead of the Federal Reserve Meeting
The spotlight is now on the Federal Reserve’s October FOMC meeting. Traders are eager to hear dovish statements that might signal the end of quantitative tightening. Futures suggest a 65% probability of a 25-basis-point interest rate cut, which could bolster risk-taking if realized.
Potential Rebounds and Market Reactions
Throughout the turbulence, some market watchers like former BitMEX CEO Arthur Hayes view this downturn as a potential buying opportunity. Research firms note that the decreased leverage offers opportunities for rebuilding Bitcoin positions. The timing of market rotation, influenced by the Federal Reserve’s signals, arguably holds the key to determining October’s market trajectory.
