Bitcoin

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Bitcoin’s nearly 10% drop last week was seen as a “healthy realignment” that should reduce the risk of sudden price declines in the coming days and weeks, according to analysts from crypto exchange Bitfinex. 
In an October 6 report, Bitfinex analysts noted that Bitcoin’s dip to the $60,000 support level, along with other critical technical factors, indicated reduced volatility. 
Bitcoin had rallied to $66,600 on September 27, but optimism quickly faded as rising geopolitical tensions in the Middle East and concerns over the U.S. economy dampened the risk appetite. 
From September 27 to October 4, Bitcoin experienced a 9.94% decline from peak to trough, which analysts attributed to a “cautious sentiment” among investors at higher price levels. 
Bitfinex analysts speculated that buyers might look to accumulate more Bitcoin at lower prices. 
“As Bitcoin experienced its first consecutive series of four red days since early August, the market saw a healthy realignment,” they said. 
The drop also led to a reduction in open interest, falling from $35 billion to a more stable $31.8 billion. 
On October 1, over $450 million worth of long positions were liquidated during the decline, suggesting that the market was biased toward capturing the upside. 
“The large amount of liquidations relative to the price decline highlights the long-biased leveraged positioning in the crypto market, especially after crossing the $65,000 technical and psychological level,” the analysts wrote. 
The report also noted that positive U.S. labor data in September and October had buoyed the market, with broader optimism expected to return as the Federal Reserve may cut interest rates again in November. 
Looking ahead, the analysts pointed to the recent rebound to $62,650, which showed signs of “spot buying aggression.” 
However, they cautioned that it’s too early to make “definitive conclusions” about short-term market direction. 
“As the market remains reactionary, clues for future direction for BTC and the market in general may emerge from early-week trading sessions, particularly in the U.S.,” the report concluded.

Bitcoin Drop is a ‘Healthy Realignment’, Analyst Claims

Crypto Intelligence

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