In short
- Bitcoin is down 20% from its peak and needs a 10% bounce to break even for the quarter.
- Analysts cite U.S.-China tensions, lockdown risks and reduced liquidity as drivers of the range-bound trading.
- A positive finish will depend on inflation, liquidity, potential interest rate cuts and steady ETF inflows.
Bitcoin remains in a sideways trend following its recent selloff, and market participants are debating whether Bitcoin can overcome significant headwinds to finish the year strong.
Despite the volatility and market downturn, experts remain optimistic and expect Bitcoin to end the fourth quarter on a positive note. But that prospect is not without contingencies.
A bounce of at least 10% is needed for Bitcoin to reach its quarterly breakeven point of $114,000. A rally above this level would end the quarter in the green.
The top cryptocurrency is down about 20% from its all-time high of $126,080, according to CoinGecko data. This is a decline exacerbated by the historic October crash that triggered the liquidation of $19 billion.
Risk aversion has seeped into November, sending Bitcoin’s performance down 15% over the past month. Stocks have gone through similar trials, with the tech-heavy Nasdaq down about 3.4% over the past seven days.
Responsibility for macroeconomic and geopolitical uncertainty is squarely raised. decryption said.
“The US-China trade war is likely to have a greater impact on risk assets, including cryptocurrencies, than people expect,” said Daniel Liu, CEO of Republic Technologies. decryption. He added that a potential government shutdown is causing market hesitation.
Adam Chu, senior researcher at GreeksLive, said this caution is reflected in market behavior and reduced liquidity. decryptionCryptocurrency options data points to neither bulls nor bears taking advantage.
“Instead, they expect the market to remain range-bound,” Chu said.
The analyst also emphasized systemic risk, warning that “invisible institutional defaults can occur at any time” and that “the recent continued defaults in DeFi and stablecoins may signal the dawn of a crisis.”
Experts argue that the path to a positive finish to the year remains viable given changes in the macro environment.
“If inflation data continues to be subdued and liquidity improves, Bitcoin could actually end the fourth quarter on a positive note,” said Ryan Lee, senior analyst at Bitget. decryption.
Key drivers include the possibility of an interest rate cut by the Federal Reserve and a weaker dollar, which could improve risk appetite, he said, noting how “increasing long-term holder accumulation and ETF inflows” could be seen as a sign of renewed confidence.
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