Bitfinex Alpha: Bitcoin Experiences Healthy Pullback, But Outlook Remains Uncertain
In Brief
Bitfinex Alpha reported that Bitcoin’s 10% retracement during the week was driven by spot selling and unwinding of leveraged positions.
The digital asset trading platform Bitfinex Alpha released its latest market analysis report, offering insights into the current state of Bitcoin.
The firm observed that Bitcoin experienced a 10% retracement during the week, primarily driven by aggressive spot selling and a broader market unwinding of leveraged positions. After reaching a local high of $66,587 on September 27th, its price declined sharply, particularly after losing the critical support level of $65,200, which triggered cascading long liquidations and caused the price to drop to $60,000.
Additionally, spot market selling was further impacted by escalating geopolitical tensions between Iran and Israel, which heightened de-risking efforts and contributed to long liquidations totaling $450 million on October 1st. As Bitcoin faced its first series of four consecutive red days since early August, the market underwent a necessary realignment. Open interest (OI) decreased from overheated levels above $35 billion to $31.8 billion, indicating a stabilization of market conditions and a reduced risk of sudden price fluctuations.
On October 4th, Bitcoin recovered to $62,500, buoyed by positive labor market data, and climbed to a peak of $64,027 during early trading sessions on October 7th as some spot buying activity returned. However, it may be premature to draw firm conclusions regarding the short-term direction of the market. As the market continues to react to various factors, insights into the future trajectory of Bitcoin and the broader market may emerge from trading positions observed in the early sessions of the week, especially within the US market.
US Labor Market Shows Resilience With Strong Job Gains, Boosting Market Sentiment
The firm highlighted that the labor market data, which contributed to the market’s positive sentiment, indicated that September saw its strongest job gains in six months, with the unemployment rate decreasing from 4.2 percent in August to 4.1 percent. This decline reflects the economy’s resilience.
However, despite the robustness in the labor market, other sectors have not yet experienced the benefits of eased monetary policy. The Federal Reserve is anticipated to lower interest rates again in November, yet the manufacturing sector continues to face challenges due to elevated rates and reduced demand compared to the previous year. In contrast, the US service sector experienced a sharp increase in new orders in September, achieving its highest activity level in 18 months. This growth suggests sustained economic strength throughout the third quarter of 2024, even as different sectors encounter varying degrees of pressure.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
