Bitcoin was trying to recover from its 5% dip on October 1 and the community was waiting for the beginning of the Uptober Bullrull when BTC gave them one more shock with another 5.9% dip. This sent the largest cryptocurrency to bottom at $60,200. Is there a possibility of Bitcoin going down further with shockwaves? Let’s understand.
What the Chart Says?
Before we dive into the reasons why this crash happened, let’s analyze the charts to see what happened. After much struggle, Bitcoin succeeded in claiming a support above $65,500 however the intense seller pressure caused the formation of a consolidation zone. As the last day of bearish month started and everyone became bullish, the Bitcoin could not hold the position because of getting overbought. This overconfidence of investors gave bears a chance to pull the market down.
As BTC fell down from its support zone, a panic burst in the market causing paper hands to sell. $62,800 zone provided support and helped the price to bounce back. However, the $64,000 zone, now being the active resistance, declined the price. This pushed down the bitcoin price further and it received support from the 200 Moving average at $60,200. Apart from these market reasons, there are two non-market reasons that are the leading cause for this fall.
Non-Market Ingredients of Bitcoin Crash
The two major non-market reasons for Bitcoin crash on October first are Jerome Powell and Israel-Iran war.Â
The Chair of the Federal Reserve of the United States, Jerome Powell, said on Monday that the Fed is looking to bring the rates to neutral but that will happen over time. He emphasized that policymakers are not on a present course to make huge cuts in rates. This gave a signal to the market that the Fed might be thinking not to provide rate cuts in the upcoming Federal Meeting on November 6-7, 2024.Â
The war between Israel and Iran is not just shaking the Middle East but spreading its effects on a global level. Any war of such level always disturbs the smooth flow of the markets across nations. Iran launched a cruise missile attack on Israel causing huge damage to the nation and international market.Â
Looking Ahead!
If you have been in the market for some time, you would be aware that wars impact the traditional market as well as the crypto market to a greater extent. Last time Bitcoin faced a huge crash caused by Russia opening war fronts against Ukraine and now the Iran-Israel war is repeating history. Bitcoin has been trying to recover from yesterday’s crash, however it looks like we should be ready to witness more dip. If conditions do not improve soon, Bitcoin might have to face $53,600 again. Investors and traders are advised to stay cautious.
