Bitcoin's short-term pullback may be brewing a stunning reversal, with $67,000 becoming a watershed level
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Bitcoin's short-term pullback may be brewing a stunning reversal, with $67,000 becoming a watershed level
The dollar index rose to a year-to-date high, putting further pressure on risk assets including cryptocurrencies.
Navigating Web3 tides with focused insightsBy BitpushNews
Financial markets saw broad-based selling on Wednesday. On the macroeconomic front, driven by strong U.S. economic data and concerns over deficits, the 10-year U.S. Treasury yield rose to 4.25%, its highest level since July, while the dollar index climbed to a yearly high, adding further pressure on risk assets including cryptocurrencies.
U.S. equities closed lower across the board, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite down 0.92%, 0.96%, and 1.60% respectively.
According to Bitpush data, Bitcoin broke below the $67,000 support level early Wednesday, briefly dropping to a low of $65,160 before bulls pushed it back above $66,000. At the time of writing, Bitcoin was trading at $66,484, down 1.82% over the past 24 hours.
The altcoin market remained weak, with most tokens among the top 200 by market cap posting losses.
Jupiter (JUP) led the gains, rising 5.5%, followed by ZetaChain (ZETA) and UMA (UMA), up 4.4% and 4% respectively. First Neiro (NEIRO) suffered the largest drop, falling 15%, while Baby Doge Coin (BabyDoge) and Safe (SAFE) declined 10%.
The total cryptocurrency market capitalization currently stands at $2.28 trillion, with Bitcoin’s market dominance at 57.5%.
Short-term weakness shown, but new highs remain possible
Bitcoin has risen 18% over the past few weeks, climbing from $58,845 on October 9 to a peak of $69,495 on Monday. However, recent momentum has weakened, accompanied by stagnant stablecoin trading volumes since late September. The Fear & Greed Index has surged to 72, marking the highest level of "greed" since July, leading analysts to believe Bitcoin may enter a correction and consolidation phase.
"As Bitcoin attempts to breach the $70,000 mark, on-chain indicators suggest the market may be overheating," wrote analysts at Copper Research. "Despite optimistic ETF inflows, a short-term top appears more likely at this stage."
"Bitcoin on-chain metrics can reveal how many addresses are in profit based on the price at which coins moved versus the current price," they added. "A pattern emerges: when volatility spikes—profitable addresses rise from around 75% to 98% (current rate)—selling pressure begins as investors realize unrealized gains. This could signal a short-term peak ahead of the U.S. election."
Bullish sentiment in derivatives markets has recovered somewhat but remains subdued. Data from Copper Research shows that while three-month rolling basis trades have risen, they remain far below earlier 2024 highs, indicating stable future price expectations but relatively low overall trading activity.
In another report, Bernstein analysts forecast that Bitcoin could reach as high as $200,000 by the end of 2025, as the crypto market enters a 'new institutional era.'
"Currently, ten global asset managers hold around $60 billion in regulated [ETFs], up from $12 billion in September 2022. By the end of 2024, we expect Wall Street to replace Satoshi as the largest Bitcoin wallet," the report stated.
Regarding Bitcoin’s short-term outlook, market analyst Rekt Capital noted, "Bitcoin is now in the process of retesting the upper channel boundary (black line in chart below) as support."
Specifically, the upper channel represents a price level of approximately $66,200. BTC recently tested the late-September highs during its downward move, so a weekly close above this $66,200 level would be needed to confirm renewed upward momentum.
Michael van de Poppe, founder of MN Consultancy, expressed optimism, suggesting Wednesday's dip to $65,000 may have marked the bottom of the correction. He said on X: 'Indeed, Bitcoin dropped into the $65,000 zone and quickly reversed upwards. I believe this minor pullback is coming to an end. With macro narratives building—including the election—it’s time to see bond yields decline and crypto markets rally.'
Fairlead Strategies, a U.S.-based research firm, offered a more cautious view. In a report, it stated that Bitcoin triggered a countertrend sell signal over the weekend, which could lead to several weeks of consolidation near current levels. "Bitcoin is in a testing phase, currently challenging the trendline resistance near $67,700. Support remains near $59,800, with resistance at $67,700 and $73,800," Fairlead noted.
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