After beginning the week above the critical $115,000 mark, Bitcoin (BTC) and the broader cryptocurrency market initially showed signs of recovery. However, BTC has resumed its downward trajectory, experiencing a 4% decline over the past 24 hours. This downturn has had a cascading effect on other altcoins, particularly Ethereum (ETH) and XRP.
BTC, ETH, XRP’s Plunge Explained
With the Bitcoin drop, Ethereum recorded a 5% drop, once again losing the pivotal $4,000 support level, while XRP has suffered even greater losses, plummeting by 7% during the same timeframe. This decline has pushed XRP closer to $2.40 as of Tuesday, highlighting the volatility affecting altcoins in the current market environment.
Related Reading
According to Bloomberg, this recent Bitcoin and crypto slide can be attributed to geopolitical tensions, specifically China’s imposition of restrictions on the American units of Hanwha Ocean Co., one of South Korea’s largest shipbuilders.
This action is seen as a retaliatory measure against US sanctions targeting the Chinese shipping sector. Bitcoin and the crypto market were already reeling from a brutal selloff that began on October 10, which resulted in approximately $19 billion worth of leveraged positions being liquidated.
This selloff, which saw the Bitcoin price drop toward $102,000 last Friday, was triggered by US President Donald Trump’s threats of increased tariffs on China in response to new export controls.
Three Scenarios For Bitcoin
Market analysts are closely monitoring Bitcoin’s performance, noting that a drop below the $110,000 threshold could initiate a test of the $104,000 to $108,000 liquidity band, according to Timothy Misir, head of research at digital-assets analytics platform BRN.
“The market now enters a consolidation phase, characterized by renewed caution, selective risk-taking, and a more measured rebuilding of confidence across both spot and derivatives markets,” commented analytics firm Glassnode.
Furthermore, market expert Doctor Profit has outlined three potential scenarios for Bitcoin’s trajectory over the short, mid, and long term on social media platform X (formerly Twitter).
Related Reading
In the short term, covering the current month, the Bitcoin outlook is neutral. Although a slightly bullish sentiment was noted yesterday, it has reverted to neutral as new data emerges, emphasizing the need for more information to make a conclusive decision.
For the mid-term outlook, spanning one to three months, the sentiment is bearish. The expert indicates that the market has recently entered the early stages of a bear phase. While there may be instances of dead cat bounces, he suggests that the overall direction for the mid-term appears to be downward.
Looking further ahead, in the long term (three to twelve months), the analysis remains extremely bearish for Bitcoin and crypto as the macroeconomic environment indicates an impending global economic upheaval, which many believe is closer than it appears.
When writing, Bitcoin trades just above its key support for the short-term at $110,300.
Featured image from DALL-E, chart from TradingView.com
Credit: Source link