Why Is Bitcoin Facing a Price Fall?

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As a seasoned researcher with years of experience in the crypto market, I have seen my fair share of volatility and panic selling. Today’s Bitcoin price drop of more than 3% is not unusual, considering the macroeconomic events unfolding in the United States and geopolitical tensions in the Middle East.

On Monday, Bitcoin‘s price dropped by over 3% due to selling panic from investors as they prepared for a significant economic week in the U.S. and escalating geopolitical issues in the Middle East. This turmoil resulted in approximately $200 million worth of crypto assets being liquidated, with around $150 million coming from long positions. In contrast, many other major cryptocurrencies have demonstrated greater resilience against falling prices, reflecting the optimistic sentiment associated with altseason.

Why Bitcoin Price Is Dropping Today

Bitcoin’s price has been slipping, with bears seemingly gaining control over bulls. Today, the value of Bitcoin dipped by more than 3%, reaching a low of $63,249. This drop was likely triggered by an initial wave of selling panic following news that Japan’s Nikkei 225 index dropped nearly 5%. The cause? Potential Prime Minister Shigeru Ishiba announced plans for elections at the end of October. As a result, the Japanese yen became stronger and Japanese government bonds saw a surge in value due to this development.

The general feeling towards cryptocurrencies remains high with the Crypto Fear & Greed Index still showing “extreme greed” at a score of 61 today. Even Bitcoin’s significant decline has fueled talk about an “altseason,” as the values of top alternative coins like Ethereum, Solana, and Ripple have dropped slightly by more than 1%.

Additionally, the assassination of Hezbollah leader Hassan Nasrallah has ignited turmoil across the Middle East. The Israeli military persists with air raids on Lebanon, and Israeli Defense Forces (IDF) special forces carry out operations in Hezbollah tunnels. Moreover, they declared that Fateh Sherif, the head of the Hamas terrorist organization’s Lebanese branch, was killed in an airstrike.

Fateh Sherif, the leader of the Lebanon division within the Hamas militant group, was targeted and killed in an accurate military operation carried out by Israel’s Air Force.

Sherif functioned as the liaison, managing Hamas’ acts of violence in collaboration with Hezbollah agents stationed in Lebanon. Additionally, he was instrumental in Hamas’ initiatives within Lebanon aimed at enlisting new members.

— Israel Defense Forces (@IDF) September 30, 2024

Heavy Macro Week in the US Sparks Selloff

This week is set to feature significant U.S. economic developments, beginning with the anticipated appearance of Federal Reserve Chair Jerome Powell later today. On Tuesday, we’ll see the publication of JOLTs job opening data and ISM Manufacturing PMI figures. These events have even triggered a drop in Bitcoin prices today.

This coming Friday, the U.S. Department of Labor plans to publish job creation figures and unemployment rates for the month of September. Financial market participants anticipate that these employment numbers may show a decrease, which could potentially lead to the Federal Reserve lowering interest rates by another half percentage point.

During the same period, Federal officials are set to deliver speeches, causing a wave of unrest in both the stock and cryptocurrency marketplaces.

In the past day, Bitcoin’s price dropped approximately 3%, now standing at around $63,641. Earlier today, it reached a low of $63,273 and peaked at $66,069. Interestingly, the trading volume has experienced a significant surge of about 94% within the same period.

According to Coinglass data, the total Bitcoin futures open interest decreased by more than 1% within the past 24 hours. The significant reduction appears to have originated from CME, with a drop of over 3% in their Bitcoin futures open interest. Meanwhile, both Binance and Bybit crypto exchanges seem to be experiencing investor buying activity.

Last week, data from CoinShares revealed that digital asset investment products amassed a total of $1.2 billion. This growth is anticipated to continue due to the expected accommodative monetary policy by the Fed. Specifically, Bitcoin attracted inflows worth $1 billion, while Ethereum ended its five-week streak of outflows with an inflow of approximately $87 million.

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2024-09-30 15:10