Bitcoin's (BTC) modest rebound from the geopolitical turmoil-induced sell-off was arrested at $62,400 during the Wednesday U.S. session, tumbling back below $61,000 in the later hours.
BTC recently changed hands at $60,200, down 3% over the past 24 hours, while the broad crypto market benchmark CoinDesk 20 index was 3.8% lower during the same period. Altcoins fared worse, with ether (ETH), Ripple's XRP (XRP), Cardano (ADA), Chainlink (LINK) and Near (NEAR) declining 5%-7% during the day.
U.S. stock indexes remained mostly flat after yesterday's losses on rising conflict between Israel and Iran. Gold pared some of its gains while oil retraced to $70 from its intraday top at $72, perhaps a sign of easing investor concerns over further military escalation.
The Japanese yen tumbled 1.8% against the U.S. dollar on incoming prime minister Shigeru Ishiba ruling out further interest rate hikes in the near term, saying that the country's economy isn’t ready yet for more restrictive monetary policy. Keeping central bank policy loose would support risk assets, as the Bank of Japan's surprise rate hike in August triggered a broad-scale market crash as traders were forced to unwound their positions funded by cheap yen-based loans.
Crypto's dismal start of October, which was widely expected to be a bullish month, has left crypto traders worried about further downside as the euphoria from bitcoin's swift run to $66,000 from $52,000 last month quickly faded.
Whether prices rebound or tumble lower may depend on bitcoin's ongoing retest of its "Bull Market Support Band," a key trend indicator defined by the asset's 20-week simple moving average (SMA) and a 21-week exponential moving average (EMA). The band often served as support for prices during previous uptrends, and currently ranges between $61,100 and $62,900. A bounce from the band would reinvigorate the uptrend from the September lows to target, but a decisive break below could undo all the recovery, with many more weeks chopping below $60,000.
Analysts at crypto hedge fund QCP said that bitcoin could tumble to as low as $55,000 if the Middle East conflict escalates further and investors move risk-off, but the $60,000 level acted as solid support so far.
"Middle East geopolitics will steal the limelight for now, but the shallow sell-off suggests that the market remains well bid for risk assets," QCP said in a Tuesday update.
"This minor setback shouldn't distract from the bigger picture," QCP analysts added. "Asset prices are expected to remain supported heading into 2025, as both the largest (the Federal Reserve) and third-largest (People's Bank of China) central banks in the world have started their cutting cycles in earnest."
Blockchain analytics firm CryptoQuant noted signs of BTC demand recovering from the summer slump, driven by U.S.-listed spot ETFs.
If demand picks up and favorable year-end seasonality materializes, BTC could target the $85,000-$100,000 range in the last quarter, according to CryptoQuant.
"These levels align with the upper range of the on-chain trader realized price bands, where short-term traders often take profits following price rallies," CryptoQuant analysts said.
