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I The price of Bitcoin it briefly crashed below $67,000 on October 21, though it quickly regained this level as support before the daily close. This drop in price is believed to be due to its correlation with the stock market, which has also experienced its decline.
Why Bitcoin Price Dropped Below $67,000
The price of Bitcoin fell below $67,000 mainly due to its correlation with the US stock market. Data for IntoTheBlock shows that the correlation between the flagship crypto and the S&P 500 is currently at 0.63, indicating a strong positive price correlation. The S&P 500 and Dow fell from their record highs on Oct. 21 ahead of earnings reports.
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Stock market declines and Bitcoin price crash it is believed to be driven by uncertainty on a large scale. This market uncertainty stems from rising inflation expectations and concerns about how government spending is impacting these developments. Therefore, market participants are currently cautious about their next move, while others are waiting to see what the moves are The US Federal Reserve it will take to keep inflation within their 2% target.
I the upcoming US election and contributed to market uncertainty, especially as the presidential race between Donald Trump and Kamala Harris looks tight. It is not unusual for traders to wait on the sidelines until after the election to get certainty about the outlook of the market under a new President.
Other Factors Contributing to Price Crashes
Commentator Justin Bennett cited “open interest (OI) at July highs, whales shortening lengths and last week’s perp-driven rally” as other factors behind Bitcoin’s price crash. He said that these things related to the upcoming US election are the ones that caused the price to drop.
On the impact of the US election, the analyst noted that the markets tend to be funny before the US presidential election, which is now thirteen days away. He noted that it would have been a “disaster” if the markets had not laughed early and continued into election night.
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Bennett made this statement while commenting on why he expected the withdrawal of Bitcoin and other crypto assets. Indeed, the analyst since last week has been saying that the flagship crypto will face a price correction soon. He had said before now that he would not be surprised if the price of BTC corrects about $63,000.
The latest X posthe highlighted the $65,800 range as the first test of Bitcoin’s price. Holding above this level may invalidate his trade setup.
At the time of writing, the price of Bitcoin is trading around $67,700, down about 2% in the last 24 hours, according to the data from CoinMarketCap.
The featured image was created with Dall.E, a chart from Tradingview.com
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