Bitcoin Price Drops from $73,000 to $69,000 Amid Market Uncertainty
November commenced with a downturn in the crypto market as Bitcoin, which experienced a bull run at the end of October, lost momentum. The anticipated "Moonvember" began with a crash, dropping from $73,000 on October 31 to $69,000 on November 1, resulting in approximately $296 million in liquidations, primarily affecting long positions. Although bulls managed to stabilize Bitcoin at $69,000, the swift decline raised concerns among traders.
Key Reasons Behind Bitcoin’s Price Drop
Crypto expert Ash Crypto attributes the recent price drop to four main factors, indicating it reflects the broader economic landscape rather than merely crypto-specific events. Reports suggest Iran may be planning military action against Israel from Iraqi territory, creating uncertainty for Bitcoin investors who might exit the markets. As noted by Ash Crypto, “war is bad for Bitcoin and crypto.”
Additionally, earnings reports from major tech companies like Microsoft and Meta, which showed rising AI-related costs despite beating expectations, contributed to a downturn in tech stocks that affected other financial markets, including crypto.
A rise in US Treasury bond yields, particularly the 10-year note now above 4.3%, makes government bonds more attractive, leading investors to prefer less volatile assets over cryptocurrencies.
Finally, an increase in Core Personal Consumption Expenditures (PCE) to slightly above 2.7% could push the Federal Reserve toward a hawkish stance, potentially resulting in higher interest rates or delayed rate cuts. Both scenarios could reduce demand for Bitcoin, which tends to thrive in low-interest environments, as evidenced by the interest rate cut on September 18.
Looking Ahead: What’s Next For Bitcoin?
Ash Crypto, like many analysts, believes Bitcoin's dip is temporary. He draws parallels to the initial market dip in October and anticipates that November, or "Moonvember," will follow a similar path. The analyst is optimistic that Bitcoin has the potential to exceed $80,000 before the month's end.
As of writing, Bitcoin is trading at $69,678, reflecting a 4% increase in the past 24 hours.
Featured image from Pexels, chart from TradingView