The dollar index has risen to a year-to-date high, putting further pressure on risk assets, including cryptocurrencies.
Written by: BitpushNews
The financial markets experienced a broad sell-off on Wednesday. In macroeconomic terms, driven by strong U.S. economic indicators and concerns about the deficit, the yield on the 10-year U.S. Treasury rose to 4.25%, the highest level since July. Meanwhile, the dollar index reached a year-to-date high, putting further pressure on risk assets, including cryptocurrencies.
At the close of the U.S. stock market, major indices all fell, with the S&P 500, Dow Jones, and Nasdaq dropping by 0.92%, 0.96%, and 1.60% respectively.
According to data from Bitpush, Bitcoin broke below the support level of $67,000 early Wednesday, briefly falling to a low of $65,160, before bulls successfully pushed it back above $66,000. As of the time of writing, Bitcoin's trading price is $66,484, with a 24-hour drop of 1.82%.
The altcoin market is weak, with tokens ranked in the top 200 by market capitalization mostly declining on the day.
The biggest increase is Jupiter (JUP), which rose by 5.5%, followed by ZetaChain (ZETA) and UMA (UMA), which rose by 4.4% and 4% respectively. First Neiro (NEIRO) had the largest drop, falling by 15%, while Baby Doge Coin (BabyDoge) and Safe (SAFE) dropped by 10%.
The current overall market capitalization of cryptocurrencies is $2.28 trillion, with Bitcoin's market share at 57.5%.
Showed weakness in the short term, but is expected to set new highs.
In the past few weeks, Bitcoin's price has risen by 18%, climbing from $58,845 on October 9 to a peak of $69,495 on Monday. The recent upward momentum has weakened, coinciding with stagnant stablecoin trading volumes since the end of September. The Fear and Greed Index has surged to 72, marking the highest level of greed since July, and analysts believe Bitcoin will enter a period of correction and consolidation.
Copper Research analysts wrote: 'As Bitcoin attempts to break through the $70,000 barrier, on-chain indicators may suggest the market is a bit overheated. Although ETF inflows are optimistic, a short-term peak is currently more likely.'
They stated: 'On-chain movements of Bitcoin can provide information on how many addresses are in profit based on the price at which Bitcoin moves and the current price.' 'Patterns emerge, and it is clear that when significant volatility occurs—address profitability rates rise from around 75% to 98% (the current ratio)—the market begins to face selling pressure as investors hold unrealized gains. This may signal a short-term top for Bitcoin ahead of the U.S. elections.'
Bullish sentiment in the derivatives market has somewhat recovered, but still appears insufficient. Data from Copper Research shows that the rolling basis trading over three months has increased, but remains far below the highs earlier this year. This indicates that market expectations for future prices are relatively stable, but overall trading activity is low.
In another report from Bernstein, its analysts predict that as cryptocurrencies enter a 'new institutional era', Bitcoin's price could reach as high as $200,000 by the end of 2025.
The report stated: 'Currently, the top ten asset management companies hold about $60 billion in regulated [ETFs], while the figure was $12 billion in September 2022. By the end of 2024, we expect Wall Street to replace Satoshi as the largest Bitcoin wallet.'
As for the short-term price of BTC, market analyst Rekt Capital pointed out, 'Bitcoin is currently in the process of retesting the channel top (the black line in the chart below) as a support level.'
Specifically, the channel top represents a price point of approximately $66,200, and BTC has tested the late September high during its recent downward trend. Therefore, it needs to close above the channel top around $66,200 on a weekly basis to confirm upward momentum.
Michaël van de Poppe, founder of MN Consultancy, expressed optimism that Wednesday's pullback to $65,000 could mark the low point of this adjustment. He stated on the X platform: 'Indeed, Bitcoin dropped to the $65,000 area and quickly reversed upward. I believe this minor adjustment is about to end. The macroeconomic narrative is starting, including the elections, and it's time to see these bond yields decrease and the cryptocurrency market flourish.'
U.S. market research firm Fairlead Strategies provided a more cautious view. In a report, the firm stated that Bitcoin triggered a counter-trend sell signal over the weekend, which could lead to Bitcoin consolidating around current price levels for several weeks. Fairlead stated: 'Bitcoin is in a testing zone, testing the trendline resistance near $67,700. The support level remains around $59,800, with resistance at $67,700 and $73,800.'
