Bitcoin ($BTC) drops as U.S. Stock Market slides

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As a seasoned researcher with over two decades of market analysis under my belt, I’ve witnessed bull runs and bear markets, tech booms and busts, and the meteoric rise of Bitcoin – a digital asset that was once a mere footnote in financial news. Today, I find myself reflecting on the intricate dance between traditional stocks and cryptocurrencies, with the U.S. stock market’s recent downturn casting a long shadow over Bitcoin’s path to its all-time high.

On Thursday, the U.S. stock market experienced a significant drop, making October the month with the most significant decline in stock prices since April. The decline was spurred by earnings reports from leading tech companies, which also affected the cryptocurrency market, causing Bitcoin to drop approximately 3%. As crucial employment and manufacturing data are set to be released on Friday, there remains a sense of uncertainty in the markets.

US stocks drag Bitcoin down

On Thursday, Bitcoin (BTC/USD) might push further towards its record high of $73,800, but the U.S. stock markets offered a significant counterpoint to this trend. Despite slightly improved earnings from companies like Microsoft, Meta, and Amazon, concerns over slower future growth and reduced spending expectations led to a market downturn. The S&P 500 dropped by 2%, while the Nasdaq experienced a more substantial decline of 3%.

As a crypto investor, I must admit that even Bitcoin wasn’t immune to the turbulence in traditional markets. After a relatively minor pullback up until Thursday, the price plummeted by approximately 3.7% on Thursday itself, and then dipped an additional 2% on Friday before showing some signs of recovery.

$BTC reaches major $69,000 support

The current short-term Bitcoin ($BTC) price chart indicates a recent decline from its all-time high, but overall conditions remain favorable. After dropping close to the significant 0.618 Fibonacci level, it appears that the price has recovered following a bounce off the crucial $69,000 horizontal support line, which represented the peak of the previous bull market in 2022.

If Bitcoin’s price maintains its position above the current support level, it might create an opportunity for bulls to fuel another surge, potentially exceeding the all-time high – possibly as soon as next week. Conversely, if the price drops below $69,000, there may be a risk of forming a lower low and potentially breaking the short-term trend.

Bearish weekly candle wick to the upside

For the upcoming week, there’s a potential risk due to the recent fall in Bitcoin’s price. This decline has resulted in an extended wick pointing upward on the weekly candlestick chart, which suggests a bearish trend if it persists until Sunday’s close. If this occurs, it could indicate increased volatility in Bitcoin prices over the next few weeks.

Yet, the current week isn’t finished, and the brief timeframe Stochastic RSIs are being recalculated soon, ready to show potential upward movement once more.

Monthly chart for $BTC is promising

Looking at a broader monthly perspective, things appear more optimistic. However, it’s important to note that the ‘October candle’ was unable to reach a new high before being rejected, and it represents a period of uncertainty. Yet, it also suggests a potential continuation of the bullish trend.

It’s crucial that the initial monthly candle’s body ends higher than the significant $69,000 barrier, which serves as resistance. Additionally, the monthly Stochastic RSI has shown a bullish crossover – a possible indication of substantial upward price movement ahead.

November is going to be a critical month one way or the other. 

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2024-11-01 14:06