$ETH NEW PLUNGE OF CRYPTO MARKET: WHY THE MARKET IS STRUGGLING đ
đ
The entire market is experiencing a significant decline, reviving investor concerns. After hovering around $66,000 last week, Bitcoin's price fell to $62,501 on Tuesday, a drop of 5.3%.
đ The Catalysts of an Unexpected Decline
This sudden drop originates from several key factors. Firstly, statements by Jerome Powell, chairman of the Federal Reserve, cooled market enthusiasm.
During a speech in Nashville on September 30, Powell tempered expectations regarding interest rate cuts, predicting only two reductions of 25 basis points each by the end of the year.
This perspective led to an adjustment in market expectations. According to the CME FedWatch Tool, the probabilities of a 50 basis point rate cut in November dropped from 53% last Friday to 38.2% after Powellâs remarks.
Moreover, the escalation of tensions in the Middle East has increased investorsâ risk aversion, weighing on volatile assets like Bitcoin.
đȘ A BTC Market Demonstrating Its Resilience
Despite this decline, several indicators suggest underlying resilience in the Bitcoin market. Data from CryptoQuant reveals that the $63,000 level corresponds to the realized price by short-term holders, serving as support since mid-September.
Additionally, capital inflow into BTC ETFs remains significant, albeit decreasing. According to Farside Investors, Bitcoin ETFs recorded net inflows of $494.4 million last Friday, including $203.1 million for Ark Investâs ARKB ETF and $123.6 million for Fidelityâs FBTC.
IntoTheBlock highlights another potentially bullish factor: the increasing demand for BTC in decentralized finance. Currently, 1% of the total BTC supply is locked in DeFi protocols, thus reducing available liquidity in spot markets and potentially exerting upward pressure on prices.
In this uncertain economic context, investors need to remain vigilant. Bitcoin may experience further fluctuations in the short term before potentially resuming it's upward journey ahead.
