What caused the recent Bitcoin price drop? Analysts cite a combination of factors.
The cryptocurrency market came under severe selling pressure in the first week of November, with the outlook weakening.
As October’s volatile run continues, Bitcoin fell nearly 21% from its recent high to $99,000 on Tuesday. While BTC soon returned above the psychological $100,000 threshold, experts believe the crypto market’s extraordinary rally may be over for a while.
The declines in Bitcoin and altcoins over the past week are particularly striking. Today, Bitcoin rebounded slightly to just below $101,000, but it’s still down about 5% on a weekly basis. Ethereum fell 12% to below $3,372 during the same period, while Solana fell 19% to below $158.
While Bitcoin advocates tout the asset as a “gold-like independent store of value,” its price movements are also aligned with global economic conditions. Last week’s cryptocurrency market weakness coincided with uncertainty surrounding the Fed’s future policy and a decline in the S&P 500.
Jasper De Maere, OTC trader at Wintermute, noted that the current weakness is a “combination of the October 10 crash, a slightly more hawkish tone from the Fed, and a general risk-off trend.”
Recent statements from Fed Chair Jerome Powell have also dampened the crypto market. Powell said the October interest rate cut could be the last of the year, noting that committee members have “differing views” on the future. Bitcoin and Ethereum retreated 1.6% and 2%, respectively, in the 24 hours following Powell’s remarks.
Some analysts believe the crypto market weakness could persist for some time. “Many long-term investors who believe in the four-year cycle theory are selling positions, convinced the cycle has peaked,” said James Butterfill, research director at CoinShares.
