Alvin Lang
October 9, 2024 04:02
According to Bitfinex Alpha, the price of Bitcoin fell 10% due to a market sell-off and geopolitical tensions, increasing uncertainty about its future direction.
Bitcoin (BTC) has experienced significant price declines over the past week, including a 10% drop, as reported by Bitfinex Alpha. This downturn was primarily driven by spot market selling and a wave of liquidation of leveraged positions. The cryptocurrency’s value plummeted after reaching a high of $66,587 on September 27, with the loss of the crucial $65,200 support level triggering a series of liquidations.
Market Dynamics and Economic Factors
The selloff intensified as geopolitical tensions between Iran and Israel increased, causing investors to flee risky assets. As a result, $450 million in positions were liquidated on October 1. This marks Bitcoin’s first four-day losing streak since early August. Open interest (OI) in the market decreased from more than $35 billion to $31.8 billion, indicating a more stable market environment and reduced risk of rapid price fluctuations.
Recent recovery and economic indicators
Bitcoin showed signs of recovery, rising back to $62,500 on October 4, driven by positive labor market data. As spot purchases resumed, the price rose further to $64,027 on October 7. Despite this recovery, the near-term market direction remains uncertain. Several altcoins, including XRP and APT, have also experienced significant price fluctuations of 15-20%, reflecting the market’s sensitivity to news events.
global economic outlook
Labor market data showed strong job growth, with the unemployment rate falling from 4.2% to 4.1% in September, suggesting economic resilience. However, while the labor market remains strong, other sectors are not yet feeling the impact of easy monetary policy. The Federal Reserve is expected to cut interest rates in November, but the manufacturing sector is suffering from high interest rates and decreased demand compared to last year.
international development
The International Monetary Fund (IMF) recently advised El Salvador to reduce its dependence on Bitcoin, suggesting it adjust its Bitcoin legislation and strengthen oversight to minimize public sector involvement. These discussions are part of efforts to stabilize the national economy. Despite slow adoption, President Bukele believes Bitcoin will contribute to El Salvador’s long-term growth.
In a related development, Metaplanet Inc. bolstered its Bitcoin reserves by raising $1.46 million from the sale of Bitcoin options. The company holds 530,717 BTC, and CEO Simon Gerovich highlighted the profit potential of Bitcoin volatility.
Meanwhile, IcomTech founder David Carmona was sentenced to nearly 10 years in prison for running a cryptocurrency-related Ponzi scheme, which collapsed in 2019 and resulted in losses for investors.
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