Bitcoin Should Be Plunging Much Harder: So Why Is BTC Still Above $77K? - CryptoPotato
Bitcoin remains stubbornly above $77,000 despite facing multiple significant risk factors that should have driven its price much lower.
Bitcoin has defied market expectations by trading in the upper $70,000s despite facing unprecedented negative pressure. The cryptocurrency didn't have a good month, yet its price remains relatively stable when compared to the broader market turmoil.
Global markets experienced significant declines last week, with the Nasdaq Composite dropping nearly 8% from its October 6 record. China's CSI 300 suffered its largest monthly decline in over a decade, falling 8.5% in October and 15% over 12 consecutive weeks.
Market Pressure Points
The US Federal Reserve left rates unchanged but hotter economic data shifted expectations toward additional tightening. US GDP grew at a 3.4% annualized rate in Q3, while headline PCE inflation jumped to 3.6% in September. Markets now price an 80% probability of a 25-basis-point Fed hike in December.
The $6.3 billion hack against Binance caused Bitcoin to plunge to $76,100, but the cryptocurrency rebounded by almost $2,000 since that low. This incident, combined with other negative factors, should have driven Bitcoin's price much lower than its current level.
Geopolitical Tensions
Reports indicate US President Trump spoke with Israeli Prime Minister Netanyahu about resuming bombing Iran as soon as next week. The administration has warned Arab Gulf countries to prepare for a 'short and intense' military campaign after November 3, following the mid-term elections.
Given the scope of the Binance hack, pressure on financial markets, the expected rate hike, the midterms, and potential Middle East conflicts, Bitcoin trading between $77,000 and $78,000 appears surprisingly resilient. The cryptocurrency closed October with a decline of more than 7%, but its performance could have been much worse under these circumstances.
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