According to CoinDesk, Bitcoin (BTC) experienced selling pressure during the European morning, similar to previous price declines seen before the release of key U.S. economic data. The largest cryptocurrency by market value dropped nearly 3% on Monday to $63,600, breaking a bullish trendline that had supported its rally from the September 6 low of $52,600 to last week's highs near $66,500. Data from CoinDesk and TradingView indicated this movement. Meanwhile, futures tied to the S&P 500 remained near record highs, and the dollar index was steady at 100.30.
The decline appears to be a typical bull-market pullback following overbought conditions, according to 10x Research. Markus Thielen, founder of 10x Research, noted that Bitcoin seemed overbought in the short term, as reflected by the elevated levels of the Greed & Fear index. Thielen mentioned that current short-term reversal signals have turned bearish, suggesting a likely pullback in the coming days. He also pointed out that since June, the first week of the month, when U.S. ISM Manufacturing data is released, has often seen 10% price sell-offs. The latest decline aligns with this pattern.
The September ISM Manufacturing report, scheduled for release on Tuesday, is expected to show continued contraction in manufacturing activity for the final month of the third quarter, according to FXStreet. Thielen highlighted that the ISM Manufacturing New Orders data indicates forward-looking indicators have dropped to near-recession levels, making the upcoming data highly uncertain. A reading below 48.0 could trigger another Bitcoin drop, while a higher number might spark a rally. Despite the short-term bearish signals, Thielen maintains a bullish outlook for the fourth quarter, driven by expectations of another 50 basis-point interest rate cut by the Federal Reserve and China's recent significant stimulus announcement.
Market participants might gain further insights into the Federal Reserve's plans later today, as Fed Chair Powell is scheduled to speak on the economy at the National Association for Business Economics annual meeting in Tennessee.
