Bitcoin Dips Below $62,000 as Geopolitical Tensions Rise, Analysts Remain Optimistic
Bitcoin (BTC) experienced a significant price drop over the weekend, declining by 8.3% between September 30 and October 1, reaching a 2-week
Bitcoin (BTC) experienced a significant price drop over the weekend, declining by 8.3% between September 30 and October 1, reaching a two-week low of $60,207. Despite a modest recovery to $61,300 on October 2, Bitcoin’s price remains 16.6% below its March 2024 all-time high. This underperformance is particularly notable when compared to traditional assets like gold and the S&P 500, which are each within 2% of their recent record levels.
Market Sentiment and Geopolitical Factors
The recent price dip comes amid escalating tensions in the Middle East. On October 1, Iran launched ballistic missiles at Israel in retaliation for Israeli ground forces entering southern Lebanon. US National Security Advisor Jake Sullivan described the actions as “a significant escalation by Iran,” according to CNBC.
Adding to market uncertainty is the upcoming US presidential election in November. The vice-presidential debate on October 1 between Democrat Tim Walz and Republican JD Vance did little to alter the trajectory of what Reuters describes as an “exceptionally tight election race.”
Derivatives Markets Show Resilience
Despite the price drop, Bitcoin derivatives metrics suggest that traders are not adopting an overtly bearish stance. The Bitcoin two-month futures premium has remained near the 7% level, slightly up from 6% the previous week, indicating a neutral sentiment. Similarly, the Bitcoin options delta skew has remained neutral at -1% over the past seven days, demonstrating resilience despite the 3% decline in BTC’s price during this period.
Analyst Perspectives
Veteran trader Peter Brandt has noted that Bitcoin is forming a “three blind mice” pattern, which some interpret as a potential indicator of further price declines. However, Brandt also cautioned that Bitcoin is still locked in an ongoing downtrend, stating, “Only a close above 71,000 confirmed by a new ATH will indicate that the trend from the Nov 2022 low remains in force.”
Other analysts remain optimistic about Bitcoin’s performance in the coming months. Crypto analyst Jelle pointed out that historically, Bitcoin tends to break out in the second or third week of October, suggesting that the current retrace could be the “final shakeout before new highs.”
Looking Ahead
As of writing, Bitcoin is trading around $61,300, down approximately 0.3% in the past 24 hours. While the recent price movements have sparked some concern among investors, many analysts believe that the current market conditions could set the stage for a potential rally in the coming weeks.
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