$Bitcoin is currently valued at approximately $76,600, reflecting a decrease of about 2% in the past 24 hours and remaining significantly beneath the $80,000 mark it fell from last week. Ethereum is currently around $2,250, while Solana has dipped below $95, and NEAR has experienced a significant decline of over 10% today. The total liquidations within the last 24 hours amount to hundreds of millions once more. You can monitor live updates on our crypto prices page and get market-wide metrics on our charts page.
Why are cryptocurrency prices in decline today? There are actually five interrelated factors at play.
Factors Contributing to Today’s Crypto Downturn
1. Ongoing Effects of the Binance Hack
The massive breach that occurred last Thursday, making it the largest crypto hack to date at around $6 billion, caused Bitcoin’s value to plummet from $78,700 to the mid-$76,000 range overnight. Although Binance has reopened some withdrawal options, user confidence won’t return overnight. Each unexplained withdrawal from exchange wallets raises concerns of further issues, which is why the recent scare involving BTCPay Server has impacted market sentiment more than usual.
In light of the Binance incident, the importance of securely storing your assets cannot be overstated. Our comparison of MiCA-regulated exchanges highlights which platforms are licensed within the EU, detailing their protective measures for client funds and associated fees.
2. A Hawkish Stance from the Federal Reserve
On October 28, the Federal Reserve maintained interest rates between 3.75% and 4.00%, with two members advocating for an increase. The market had previously anticipated an impending rate cut by year-end, but that expectation has now vanished, leading to a repricing of risk assets. Cryptocurrencies, being highly liquid and traded around the clock, feel this impact more rapidly than other markets.
3. Declines in Tech Stocks Affecting Crypto
Bitcoin continues to behave like a high-beta asset akin to Nasdaq stocks. Recent sell-offs in chipmakers and AI companies have exerted downward pressure on the cryptocurrency market. Until the tech sector stabilizes, any upward movements in BTC are likely to face selling pressure.
4. Upcoming Midterm Elections
The US midterm elections set for November 4 are a significant macroeconomic event this week. Many investors are avoiding leveraged positions ahead of the uncertain outcome, resulting in more closed positions than new ones. We discussed the five potential outcomes for Bitcoin in a separate article published yesterday.
5. Forced Liquidations Amplifying Price Drops
Each price decline triggers forced sales of leveraged long positions, leading to further declines and, in turn, more liquidations. During the incident on Binance, over $600 million was lost in just one hour, and the market is still in the process of deleveraging.
Will Crypto Bounce Back? Key Levels to Watch
- $74,000: the target based on the triple top observed in the daily chart
- $73,200: represents the 200-day moving average, the last significant support of this cycle
- $80,000: reclaiming this level would reverse the bearish trend
- $83,000: a weekly close above this point would signify the end of the downtrend
In our analysis: The current sell-off is primarily driven by news and investor positioning, rather than a fundamental flaw in the market. The hack appears contained, the Fed’s pause has been factored in, and the midterms will be resolved shortly. If the 200-day moving average holds, this situation seems more like a temporary dip than a shift in trend. Should it break, we may see prices approach the $70,000 level next. Maintain low leverage until we clarify the situation.