Bitcoin Sinks Nearly 3% to $26.7K; Bulls Ponder How Low It Can Go

After failing again at $28,000 resistance over the weekend, bitcoin has retreated to its weakest level since late September.

AccessTimeIconOct 11, 2023 at 9:01 p.m. UTC
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Bitcoin (BTC) Wednesday tumbled below $27,000 for the first time since the start of the month as what’s now a four-day rally in stocks and three consecutive days of falling bond yields failed to ignite any buying interest in the crypto.

Bitcoin late in the afternoon on Wednesday was down 2.5% over the past 24 hours, underperforming the CoinDesk Market Index’s (CMI) 1.75% decline.

Among large-cap cryptos, the Ripple Labs-related (XRP), litecoin (LTC) and Polkadot’s native token (DOT) fell 2%-3%. Ether (ETH) outperformed BTC and the CMI, declining 0.7% to near $1,550. Crypto derivatives traders who bet on higher prices with long positions suffered $50 million in liquidations during the day, CoinGlass data shows. BTC constituted $22.5 million of the liquidations, marking the second-highest reading this month.

The weak price action of crypto occurred as traditional markets continued to post gains, with the Nasdaq advancing 0.7% and the S&P 500 adding 0.4% – both indexes now on a four-day winning streak. Bonds are having a winning streak of their own, with the 10-year U.S. Treasury yield lower by 10 basis points to 4.56%. It closed last Friday at 4.80%.

In economic news, the U.S. Producer Price Index (PPI) for September came in a bit stronger than expectations. The minutes from the most recent meeting of the Fed’s Federal Open Market Committee (FOMC) showed most expect one more rate hike before the monetary tightening cycle is complete.

What’s next for BTC price?

Some analysts noted BTC’s remarkable steadiness over past weeks amid falling U.S. stocks and bond market rout. However, that trend appeared to fizzle out after the crypto failed to break above a heavy resistance at around $28,000, a confluence of the 200-day and 200-week moving averages.

Popular trader XO said in an X post that “narratives will shift bearish” for bitcoin as “spot holders will start unwinding in fear or lower prices,” hinting at a potential fall below $25,000.

Caleb Franzen, founder of Cubic Analytics, noted in an X post that bitcoin broke down from its upward trend starting at its rally from $25,000, and could retest lower levels.

He said that BTC could potentially find support at the upper bound of its downtrend from summer, otherwise it could fall further to $24,000-$25,000.

Despite a potential decline in the short-term, bitcoin could be primed for higher prices in the long run. Billionaire investor Paul Tudor Jones said on CNBC that given the combination of extensive geopolitical risks and rising U.S. debt levels and interest payments, he loves gold and bitcoin.

Edited by Stephen Alpher.

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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.


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