Bitcoin dropped below the $80,000 threshold for the second time in 48 hours, reflecting renewed selling pressure in the market. Early Saturday, Bitcoin reached a low of $79,300, then briefly touched $79,400 during early European trading hours before recovering near the $80,000 mark, according to CoinGecko. This weekend decline resulted in approximately $400 million in long positions being liquidated within hours.
Tech market turbulence and shrinking liquidity
The recent Bitcoin dip followed a downturn in technology and AI stocks. As these equities came under selling pressure ahead of late October earnings reports, Bitcoin continued to demonstrate a close correlation with the tech sector’s movements.
Liquidity within the cryptocurrency market has also weakened. 10x Research, a quantitative analysis firm, reported that capital flows into crypto are diminishing, reflecting a broader hesitation among investors.
Market data showed the market capitalization of Tether (USDT) slipping 0.5% week-over-week to $182.6 billion, while USD Coin (USDC) fell 1.2% to $71.5 billion. Stablecoin supply decreased by $1.9 billion over the past week, with net redemptions over 30 days totaling $4.8 billion. 10x Research identified its stablecoin minting indicator at the 2nd percentile, describing this as a severely bearish signal for overall market liquidity.
Mini dictionary: 10x Research is a cryptocurrency market research firm focused on providing data-driven analysis and metrics for digital asset markets, including capital flows and liquidity indicators.
| Stablecoin | Market Cap Previous Week | Current Market Cap | Change |
|---|---|---|---|
| USDT | $183.5 billion | $182.6 billion | -0.5% |
| USDC | $72.4 billion | $71.5 billion | -1.2% |
Key macro events: Fed meeting and escalating geopolitical risks
The upcoming financial week is highly anticipated, with several major macroeconomic events poised to influence global markets. Market participants are awaiting the US Federal Reserve’s funds rate decision on October 28, as well as monetary policy announcements from the European Central Bank and the Bank of Japan.
Additional risk factors include upcoming US GDP and inflation data, technology company earnings, and significant cryptocurrency token unlocks.
Rising geopolitical tensions in the Middle East, including ongoing conflicts involving Iran and Houthi attacks affecting regional infrastructure, have further dampened risk appetite across asset classes.
Traders continue to watch the $80,000 level as a key psychological threshold for Bitcoin. Should macroeconomic news fail to bolster sentiment, analysts suggest that the cryptocurrency could slide further, with $75,000 emerging as the next support.
Technical analysis and potential scenarios
Analyst Benjamin Cowen emphasized Bitcoin’s proximity to its Bull Market Support Band (BMSB), a widely used technical indicator to gauge longer-term market trends. Cowen noted that, following a second consecutive weekly close below the May high, Bitcoin may be positioned to test this support band.
He also observed that market capitalization indices excluding Bitcoin (TOTAL2) and excluding both Bitcoin and Ether (TOTAL3), in addition to key stock indices like the S&P 500 and Nasdaq, have already retested their comparable support bands. Strategy (MSTR), a company known for its Bitcoin holdings, experienced similar moves.
Mini dictionary: The Bull Market Support Band (BMSB) is a technical analysis tool formed by a moving average ribbon that helps traders determine whether an asset is in bull or bear territory by identifying key support levels.
Analysts have highlighted the potential impact of the Fed’s policy outlook on Bitcoin’s short-term direction. A dovish signal could support a recovery in Bitcoin prices, while a neutral or hawkish stance may sustain volatility and raise the likelihood of a retest of the $75,000 level.
With stablecoin minting activity rooted at the 2nd percentile, 10x Research identified current liquidity as severely bearish for the crypto market, intensifying concerns over Bitcoin’s resilience near the $80,000 level.
