Bitcoin (BTC) and the rest of the crypto market experienced a downturn on Friday, dropping below $35,000 after briefly testing resistance at that level. This bearish sentiment was reflected in altcoins like Binance Coin, Solana, and Tron, which saw declines of 1.5%, 2.4%, and 1.7% respectively. The performance of Bitcoin has been closely watched by traders following the US Federal Open Market Committee (FOMC) meeting earlier in the week. Although the Fed decided to keep interest rates unchanged, they maintained that another rate hike would be necessary before the end of the year to combat inflation.
The dip in the crypto market comes after a recent recovery driven by speculation about a spot Bitcoin ETF, the Fed’s pause on interest rates, and dovish comments from Chair Jerome Powell. Additionally, institutional investors have been buying into the market again. While there has been a slight decrease in the crypto market’s fear and greed index, overall sentiment remains bullish.
The decline in the market can be attributed to profit-taking following Friday’s expiry. A significant number of BTC and ETH options are set to expire, with a notional value of $1.46 billion and $390 million respectively. CoinGlass data shows that over $150 million has been liquidated in the past two days, with more than 52,000 traders being liquidated in the last 24 hours alone.
Despite this sell-off, digital asset investment products saw inflows of $326 million last week, the highest weekly influx since July 2022. Institutional investors have shown interest in cryptocurrencies, particularly Bitcoin as they await SEC approval for a Bitcoin ETF.
Some analysts have suggested that profit booking was expected after a strong rally in October. Additionally, indicators like the TD Sequential indicator present sell signals for certain cryptocurrencies like Cardano (ADA), Shiba Inu (SHIB), Dogecoin (DOGE), and Injective (INJ). However, the market sentiment overall remains positive, and Matrixport predicts that Bitcoin could reach $45,000 in 2023 and $125,000 by the end of 2024.
Despite the recent drop, BitMEX co-founder Arthur Hayes recommends buying Bitcoin as it forms a “Golden Cross” and macro factors ease. The current price of BTC is around $34,300, with trading volume decreasing by 25% in the last 24 hours.
In conclusion, while the crypto market experienced a decline on Friday, the overall sentiment remains positive. Profit-taking following options expiry and sell signals for certain cryptocurrencies may have contributed to the downturn. However, institutional investors continue to show interest in cryptocurrencies, and analysts predict further upside potential for Bitcoin. As always, it’s important to conduct your own research before making any investment decisions in the crypto market.
Hot Take: Crypto Market Dips Amid Profit-Taking and Options Expiry
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