Bitcoin’s price has been on a downward trend for the past four days, with the fear and greed index moving back into the fear zone and geopolitical risks increasing. The price of Bitcoin dropped to $60,200, marking an 8% decrease from its recent high. This decline comes as investors are adopting a risk-off approach due to rising geopolitical tensions following Israel’s promise to retaliate against recent attacks.
In addition to these factors, risky assets like the Dow Jones, S&P 500, and Nasdaq 100 indices are experiencing a sell-off, while bond yields are on the rise. The US dollar index has also reached $101.50, its highest level since mid-September. Furthermore, the recent decline in Bitcoin can be attributed to some large investors, including Ceffu, selling off significant amounts of their holdings. Ceffu alone sold 3,372 coins worth $211.3 million, adding to the selling pressure.
Another investor sold 265 Bitcoins for $17.5 million last week, making a substantial profit from their initial investment. This selling pressure is also being fueled by increased sentiment on social media, as Bitcoin tends to drop when there is excessive enthusiasm among users. The crypto fear and greed index has dropped to 39, indicating increased fear compared to last week’s reading of 60.
Despite the recent decline, historical data shows that October is typically a strong month for Bitcoin, with average returns of 20.6%. This is followed by November, which sees even higher average returns of over 46%. Potential catalysts for a price increase include more Federal Reserve rate cuts and the conclusion of the American election period.
From a technical standpoint, Bitcoin faced a key resistance level at $66,000, which connects the highest swings since March. A clear breakout above this level, as noted by trader Peter Brandt, could confirm a bullish trend. Bitcoin has managed to stay above the 50-day and 200-day moving averages and has formed an inverse head and shoulders pattern, indicating a possible bounce back in the near future.