Three Reasons Why Bitcoin Can't Hold $64.5K
Date: 2024-09-26 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
Bitcoin rose 8.2% in the week ending September 25, rising from $59,886 to $64,816. However, the $64,500 resistance level has proven more difficult than expected. Bitcoin has been struggling to break this level since late August. Weaker macroeconomic data and other factors have led to a correction in the Bitcoin rate.
Recession fears are dampening investor interest
Weak economic data from the US has been one of the key factors reducing risk appetite among investors. According to Yahoo Finance, the average price of new homes in the US fell 4.6% year-over-year in August, the fastest decline since early 2022. Home prices have fallen for seven months in a row, the longest decline since 2009. At the same time, the supply of homes on the market remains high, with 467,000 existing homes available for sale.
Uncertainty is also heightened by the situation in China, where the central bank has cut interest rates and announced a $142 billion credit line to support businesses and households. However, analysts at Nomura believe that these measures are insufficient to curb the economic slowdown and warn that the situation is unlikely to improve without more active fiscal policy.
Impact of the US elections on the market
An additional source of concern for cryptocurrency investors is the upcoming US elections. Some experts believe that the policies of the administration of Democratic candidate Kamala Harris may be unfavorable for the development of the crypto industry. At the same time, Republican candidate Donald Trump, who actively supports Bitcoin and miners, gives hope to cryptocurrency supporters.
Despite the rise in the price of Bitcoin to its highest since August, traders are cautious ahead of the election. This is evident from the weak activity in the derivatives market - the premium on two-month futures barely reaches 6%, indicating a lack of confidence in the price growth. For comparison, at the end of July, after Bitcoin grew by 25% in three weeks, the premium on futures rose to 11%.
Expectation of a correction in the stock market
Another factor that could affect the price of Bitcoin is a possible correction in the stock market. Investors fear that the growth of the S&P 500 stock index to record levels could be followed by a decline, which will also affect the crypto market. In this context, Bitcoin traders are avoiding active bets on further price growth.
Thus, today Bitcoin faces a number of obstacles: weakening macroeconomic indicators, fears of a stock market correction, and uncertainty associated with the US presidential election.
