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November began with an unexpected slowdown in the cryptocurrency market as bitcoin, which had experienced a bull run in the last week of October, quickly lost its momentum.
The highly anticipated “Moonvember” began with an unexpected crash, plummeting from $73,000 on October 31 to $69,000 on November 1 to essentially eliminate $296 million in settlementsmost of them being long positions. Despite the bulls bitcoin-market-sentiment-enters-extreme-greed-zone/” target=”_blank” rel=”nofollow”>managing to stabilize a bitcoin price support to $69,000, the rapid slowdown raised questions among many cryptocurrency traders.
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According to crypto expert Ash crypto on social media platform x, this rapid drop in bitcoin price can be attributed to four main factors.
Key Reasons Behind bitcoin Price Fall
According to Ash crypto, the recent price of bitcoin is not a direct result of cryptocurrency-specific events, but rather a reflection of the broader economic picture. As he noted, there are currently multiple reports suggesting that Iran could be planning military action against Israel from Iraqi territory. The potential escalation of conflict in the region appeared to have created uncertainty among bitcoin investors, and many may have opted to exit the markets.
“As we all know, war is bad for bitcoin and cryptocurrencies.” the analyst x.com/Ashcryptoreal/status/1852298713227485622″ target=”_blank” rel=”nofollow”>saying.
Aside from the brewing conflict, Ash crypto also highlighted recent earnings reports from tech giants as another factor in bitcoin's price decline. Major tech companies like Microsoft and Meta recently released earnings reports that, despite beating expectations, showed rising ai-related costs. This caused a drop in many other technology stocks, which spread to other financial markets, including the cryptocurrency industry.
Another factor that Ash crypto highlighted is the recent rise in US Treasury bond yields, specifically the 10-year bond, which is now trading above 4.3%. Higher yields make government bonds a more attractive alternative, making investors less likely to invest in more volatile assets like cryptocurrencies.
Finally, the latest reading of Core Personal Consumption Expenditure (PCE) increased slightly above 2.7%. Ash crypto noted that this rise in core inflation could push the Federal Reserve toward a more aggressive stance. This could lead the Federal Reserve to adopt higher interest rates or delay rate cuts. Both scenarios could dampen demand for bitcoin, which thrives on low interest rates, as evidenced by the September 18 interest rate cut.
Looking ahead: What's next for bitcoin?
As many other crypto analysts, Ash crypto remains confident that bitcoin's latest drop is only temporary. He drew parallels with The initial market crash in OctoberAs we anticipate that November, or “Moonvember,” bitcoin-bound-for-100000-as-bitwise-cio-claims-it-doesnt-need-washington-to-succeed/” target=”_blank” rel=”nofollow”>will follow a similar path. Interestingly, the analyst believes that bitcoin still has the momentum and market interest needed to surpass $80,000 before the end of November.
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At the time of writing, bitcoin is trading at $69,678 and is up 4% in the last 24 hours.
Featured image from Pexels, chart from TradingView
