The U.S. dollar index has risen to a yearly high, putting further pressure on risk assets, including cryptocurrencies.
Written by: BitpushNews
The financial markets experienced a broad sell-off on Wednesday. On the macroeconomic front, driven by strong economic indicators from the U.S. 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 rose to a yearly high, putting further pressure on risk assets, including cryptocurrencies.
At the close of U.S. stocks, major indices fell across the board, with the S&P 500, Dow Jones, and NASDAQ indices dropping 0.92%, 0.96%, and 1.60%, respectively.
According to data from BiPush, Bitcoin fell below the support level of $67,000 early Wednesday morning, dipping 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 decline of 1.82%.
The altcoin market is weak, with tokens in the top 200 by market capitalization seeing more declines than increases that day.
The largest 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 decline, falling by 15%, while Baby Doge Coin (BabyDoge) and Safe (SAFE) both dropped by 10%.
The current overall market capitalization of cryptocurrencies is $2.28 trillion, with Bitcoin's market share at 57.5%.
Showing weakness in the short term, but expected to reach new highs.
In the past few weeks, Bitcoin's price has risen by 18%, climbing from $58,845 on October 9 to a high of $69,495 on Monday. The recent upward momentum has weakened, accompanied by stagnant stablecoin trading volume 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 face a period of correction and consolidation.
Analysts at Copper Research wrote: 'As Bitcoin attempts to push towards the $70,000 mark, 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 fluctuations in Bitcoin can provide information on how many addresses are in profit based on the price movements of Bitcoin and the current price.' 'Patterns are emerging, and it is clear that when there are large fluctuations — the profit rate of addresses rises from about 75% to 98% (the current rate) — the market begins to face selling pressure as investors hold unrealized gains. This could signal a short-term peak for Bitcoin ahead of the U.S. elections.'
Bullish sentiment in the derivatives market has somewhat recovered, but remains insufficient. Data from Copper Research shows that the 3-month rolling basis trade has risen, but is still 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, 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 states: 'Currently, the ten largest asset management companies globally hold about $60 billion in regulated ETFs, up from $12 billion in September 2022. By the end of 2024, we expect Wall Street to replace Satoshi as the largest Bitcoin wallet.'
Regarding BTC's short-term price, market analyst Rekt Capital pointed out, 'Bitcoin is currently in the process of retesting the top of the channel (the black line in the image below) as a support level.'
Specifically, the top of the channel represents a price point of about $66,200, and BTC has tested the late September high in its recent downward trend, so it needs to close above the channel top of about $66,200 on a weekly basis to confirm upward momentum.
Michaël van de Poppe, founder of MN Consultancy, stated that optimistically, a pullback to $65,000 on Wednesday may mark the low of this adjustment. He stated on platform X: 'Indeed, Bitcoin fell to the $65,000 area and quickly reversed upward. I believe this slight adjustment is coming to an end. The macroeconomic narrative is starting, including the elections; it's time to see these bond yields decrease and the cryptocurrency market flourish.'
U.S. market research firm Fairlead Strategies has provided a more cautious outlook. The company stated in a report that Bitcoin triggered a counter-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 around $67,700. Support is still near $59,800, with resistance at $67,700 and $73,800.'
