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the Bitcoin price It briefly collapsed below $67,000 on October 21, though it quickly regained that level as support before the daily close. This drop in prices is believed to be due to its correlation with the stock market, which has also seen a decline of its own.
Why did Bitcoin price fall below $67,000?
Bitcoin price fell below $67,000 primarily due to its correlation with the US stock market. Data inside TheBlock It shows that the correlation between the major cryptocurrency and the S&P 500 Index is currently at 0.63, indicating a strong positive price relationship. The S&P 500 and Dow Jones fell from their record highs on October 21 ahead of earnings reports.
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Stock market decline and Bitcoin price collapse This is believed to be driven by uncertainty in the macro environment. This market uncertainty stems from rising inflation expectations and concerns about how government spending will contribute to this development. As such, market participants are currently cautious about their next move, with some waiting to see what steps they will take US Federal Reserve They will have to keep inflation within their 2% target.
the The upcoming US elections It also contributed to uncertainty in the market, especially with the presidential race between Donald Trump and Kamala Harris looking close. It is not unusual for side traders to wait until after the election to gain certainty about the market outlook under a new president.
Other factors contribute to the collapse of prices
Analyst Justin Bennett He cited “open interest (OI) at record highs in July, whales trimming long positions and last week’s profit-driven rally” as other factors contributing to Bitcoin’s price collapse. He claimed that these factors, in addition to the upcoming US elections, are what caused the collapse of prices.
Regarding the impact of the US elections, the analyst said male Markets typically take risks ahead of the US presidential election, which is now thirteen days away. He noted that it could have been a “disaster” if markets had not backed off on risk early and continued pumping money into election night.
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Bennett made this statement while pointing out why he expects Bitcoin and other crypto assets to decline. In fact, the analyst has stated since last week that the major cryptocurrency will soon see a price correction. He previously stated that he would not be surprised if the BTC price corrects About $63,000.
Recently Share XHe highlighted the $65,800 range as a first test for Bitcoin’s price. Holding above this level may invalidate his trading setup.
At the time of writing, Bitcoin is trading at around $67,700, down about 2% over the past 24 hours, according to Data From Coin Market Cap.
Featured image created with Dall.E, chart from Tradingview.com