Bitcoin BTC $106,803.77 slipped below the $107,000 mark during Friday’s Asian trading hours. This decline continued a gradual downward trend as traders remained wary due to macroeconomic uncertainties and liquidity challenges affecting the cryptocurrency markets.
Alex Kuptsikevich, chief market analyst at FxPro, commented via email that “the attempted recovery seen on Sunday and Monday failed to gain momentum as the 50-day moving average acted as a barrier.” He added that “the market is once again testing the resilience of three-month support levels near current prices. The bears’ persistence indicates an impending test of the 200-day average around $3.5 trillion.”
Kuptsikevich noted that in May, when this line was breached, it led to significant buying activity by late July.
The crypto market’s attempt at bouncing back from last week’s liquidation shock seems to have lost steam. Earlier gains in the week were reversed with major cryptocurrencies declining steadily each day.
Ether ETH $3,821.57 hovered around $3,895 while BNB, Solana, and XRP experienced declines between 5% and 7%, erasing most of their post-crash recoveries. DOGE $.1823 and Cardano’s ADA fell over 20% within a week amid diminished speculative interest.
The sentiment in risk markets turned negative overnight as investors shifted towards stablecoins instead of Bitcoin or smaller tokens ahead of significant Federal Reserve decisions and geopolitical events.
“Altcoins are facing pressure because liquidity is moving back into Bitcoin and stablecoins due to risk-off sentiments,” explained Wenny C., COO at SynFutures in a message shared with CoinDesk. She also mentioned that thinner order books have heightened volatility across secondary markets.
Despite widespread declines on trading screens analysts suggest this downturn resembles controlled deleveraging rather than panic selling since exchange open interest has fallen to midyear lows while ETF inflows remain consistent indicating long-term capital remains steady
“This recent dip shows waning speculative appetite following last week’s macroeconomic data release,” said Wenny emphasizing “no structural changes occurred.”
Nassar Achkar chief strategy officer at CoinW stated leverage reductions often establish more robust foundations
“Consistent ETF inflows along with whale accumulation are stabilizing markets,” Achkar told CoinDesk adding “The route toward sustained recovery depends upon how swiftly underlying capital transitions into renewed risk-taking.”
The focus now shifts towards October’s FOMC meeting where traders anticipate dovish remarks after Chair Jerome Powell suggested quantitative tightening might soon conclude
Futures indicate there is approximately a sixty-five percent probability for cutting rates by twenty-five basis points which if confirmed would extend support for risks through year-end
Away from cryptocurrencies gold briefly reached new highs before retreating whereas yen strengthened amid safe-haven demand prompted by renewed trade tensions between US-China injecting volatility across commodities-equities dragging Asian stocks down two-week lows
However some see potential amidst chaos Former BitMEX CEO Arthur Hayes termed pullback ‘buying window’ K33 Research asserted reduced leverage creates opportunities rebuilding spot BTC positions “
This ongoing reset mirrors previous cycle pauses wherein leveraged positions unwound prior influx fresh investments Whether rotation occurs pre-post next Fed announcement likely determines remainder October trajectory”