Bitcoin’s value has seen a decline from its peak, even amidst significant market events, reaching crucial support levels.
Despite unprecedented ETF inflows and growing adoption, Bitcoin’s price is on the decline. In contrast, stocks and gold have performed better than BTC this week. However, waning confidence in the dollar might eventually benefit both Bitcoin and gold.
The momentum of Bitcoin’s price has slowed down despite substantial ETF investments and increased treasury holdings. After hitting a record high of $126,198, it fell below the critical $120,000 support level on October 9. Opinions among experts vary widely: some view this as a temporary setback while others attribute it to deeper structural issues.
Ruslan Lienkha, head of markets at YouHodler, suggests that equities are attracting capital away from cryptocurrencies. Investors appear hesitant to engage with high-risk assets while stock prices remain elevated. This optimism is largely fueled by anticipated monetary policy changes rather than actual economic improvements.
“Such one-sided optimism often leads to corrections in the market. Should U.S. equities undergo a significant pullback, it could trigger risk aversion across various asset classes .. In such cases ., leveraged crypto positions might be rapidly unwound leading to further declines ., ” said Ruslan Lienkha from YouHodler .
A Decline in Dollar Confidence Could Elevate Bitcoin Prices
The anticipation of reduced interest rates coupled with weaknesses in the U.S economy along with political instability is already impacting other sectors . For instance , gold recently had one of its best weeks ever , surpassing $4 , ;000 on October 8 .
Nic Puckrin , an investment analyst and co-founder at The Coin Bureau warns that although current momentum drives gold’s rally forward , this may not last long term &period ; Traders may soon explore alternatives like Bitcoin (B& #84;& #67;)
“Following more than a 50&percnt ; increase year-to-date for gold prices attention could shift towards other options ” noted Nic Puckrin from The Coin Bureau “ These include alternative metals commodities tokenized real assets alongside undervalued tokens such as bitcoin when compared against traditional safe havens like Gold ”