TLDR:
Bitcoin price declined below $61,850, now holding at $60,000 support
Potential for further losses if price fails to rise above $61,250 resistance
Trader suggests a large price move is imminent due to price compression
Anticipated Fed rate cuts could be bullish for crypto assets
US government may sell seized Silk Road Bitcoin, potentially impacting price
Bitcoin’s price is currently consolidating around the $60,000 mark, with experts suggesting that a significant move could be on the horizon.
The leading cryptocurrency has experienced a decline in recent days, dropping below the $61,850 level and now holding steady at the $60,000 support zone.
The price movement has caught the attention of traders and analysts, who are closely monitoring the situation for signs of a potential breakout.
One pseudonymous crypto trader, known as Daan Crypto Trades, noted that Bitcoin’s price is “getting very compressed” after trading at the same level for several days. This compression, according to the trader, often precedes a large price movement, though the direction remains uncertain.
#Bitcoin Getting very compressed again after trading at this same price level for the past couple of days.
Next move likely going to be a large one.
Direction will depend entirely on which side breaks out. Your best bet is to wait for confirmation in times like these.…
— Daan Crypto Trades (@DaanCrypto) October 9, 2024
Technical analysis reveals that Bitcoin is trading below the $61,500 level and the 100-hour Simple Moving Average.
A bearish trend line has formed with resistance at $61,250 on the hourly chart. If the price fails to break above this resistance, it could trigger another decline.
On the other hand, a clear move above the $62,350 resistance might initiate further gains, potentially pushing the price towards the $64,000 and $65,000 levels.
Several factors are contributing to the current market uncertainty. One significant development is the anticipation of further interest rate cuts by the United States Federal Reserve. Following a 50-basis-point cut in September, market participants are expecting additional cuts in the coming months.
HSBC anticipates a series of 25-basis-point cuts from November through June. These rate cuts are generally seen as bullish for crypto assets, as they make safer investments like term deposits less appealing to investors.
However, some market commentators have expressed concerns about the potential impact of rate cuts on those holding US dollars. Jack Mallers, CEO of Strike, suggested that the Fed’s decision to cut rates means “financial authorities have decided who is paying for their mistakes: those holding US dollars.”
Another factor influencing Bitcoin’s price is the possibility of the US government selling a large amount of seized Bitcoin from the Silk Road dark web marketplace.
The US Supreme Court recently declined to hear a case concerning the ownership of 69,370 BTC, worth approximately $4.38 billion, that the government had seized. This decision has raised concerns about a potential influx of Bitcoin into the market.
Ryan Lee, chief analyst at Bitget, believes that such a large sale could have both short-term and long-term effects on Bitcoin’s price. In the short term, Lee expects increased market volatility, which is typical during large Bitcoin sales or unlocks.
He also suggests that market sentiment may take a hit due to the sudden increase in supply, potentially leading to a wave of selling and a temporary drop in Bitcoin’s price.
Compressed price action suggests that a significant move is likely, but the direction remains unclear. Many experts recommend waiting for confirmation before making any major trading decisions.
Bitcoin’s price currently stands at $61,920, down 0.38% over the past 24 hours. The cryptocurrency continues to hold above the crucial $60,000 support level, but traders remain vigilant for any signs of a potential breakdown or breakout.
