Bitcoin managed to stay above the $60,000 support level, while many other cryptocurrencies experienced a drop in value. The U.S. dollar saw a significant increase in strength, reaching its highest level since mid-August due to positive economic data and geopolitical concerns impacting risk assets.
Bitcoin’s price fluctuated throughout the day, briefly dipping below $60,000 before rebounding to $61,500 during Asian trading hours. However, it faced a decline during European and U.S. sessions, eventually settling around $60,700. Despite this volatility, Bitcoin managed to outperform other digital assets, with the CoinDesk 20 Index falling by 1.5% during the same period. Other major altcoins like Ethereum’s ether (ETH), Ripple’s XRP (XRP), Solana (SOL), Avalanche (AVAX), and Render (RNDR) experienced losses.
Interestingly, Aptos’ (APT) native token stood out as a top performer for the day, gaining 7% in value. This surge may be attributed to Franklin Templeton’s announcement of expanding its tokenized money market fund to the Aptos blockchain. Some traders also speculated that profits from Sui’s (SUI) recent 110% rally were rotated into Aptos, contributing to its positive performance.
Bitcoin’s dominance in the market, known as Bitcoin Dominance, rose above 58%, indicating its strength relative to other cryptocurrencies. The ETH-to-BTC ratio also dropped, nearing its mid-September low of 0.038, further solidifying Bitcoin’s dominance in the market.
The surge in the U.S. dollar was driven by concerns over military escalation in the Middle East, pushing crude oil prices to over $74 a barrel. Additionally, the U.S. dollar gained strength against major currencies, reaching its highest level since mid-August. Positive ISM non-manufacturing data on Thursday further supported the dollar’s strength, typically leading to a decrease in prices for risk assets like cryptocurrencies.
A notable observation in early October was a spike in the Secured Overnight Financing Rate (SOFR), a key interbank borrowing rate. This increase could signal liquidity stress in the U.S. dollar, reminiscent of the repo crisis in September 2019. Analysts are closely monitoring this situation, with some speculating that the Federal Reserve may intervene to inject liquidity into the financial system.
Looking ahead, the upcoming U.S. jobs report on Friday will play a crucial role in determining market movements. The combination of expected rate cuts and labor market strength could impact risk assets positively. Overall, the cryptocurrency market remains dynamic and responsive to various economic and geopolitical factors, making it essential for investors to stay informed and adaptable to market changes.