Bitcoin Faces Continued Challenges Amid Economic Shifts
On Friday, September 26, Bitcoin (BTC) deepened its losses, dipping as low as $108,631. This downturn followed the revision of the U.S. second-quarter gross domestic product (GDP) growth, which dampened hopes for more aggressive interest rate cuts by the Federal Reserve.
Impact on Bitcoin Spot ETFs
The repercussions were felt across spot Bitcoin exchange-traded funds (ETFs) as well, which experienced over $253 million in outflows on Thursday, September 25. This brought the weekly total to approximately $480 million and could escalate if Bitcoin’s price falls beneath crucial support levels.
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Resistance Levels and Market Predictions
Prominent cryptocurrency analyst Michaël van de Poppe expressed concerns that resistance below $112,000 is unfavorable for Bitcoin. In a social media post on Friday morning, he suggested that failing to break above this resistance could lead the leading cryptocurrency to approach the $107,000 mark, which he identifies as a potential bottom.
“Basically, beneath the resistance at $112K isn’t great for Bitcoin. That’s why I think we’ll sweep the lows at $107K and see what we’re going to get from there. That’s the first area for a potential bottom on BTC,” van de Poppe noted on social media.
Is Bitcoin at a Critical Juncture?
The Crypto Fear & Greed Index, as reported by CoinMarketCap, fell to a low of 28/100 on Friday, marking its lowest point since April 11. This significant drop of 16 points in just one day highlights the rapid shifts in sentiment that can occur during volatile periods.
The broader cryptocurrency market also faced substantial losses, shedding over $150 billion in value within 24 hours. The total market capitalization plummeted from $3.90 trillion to $3.75 trillion at the time of writing, with Bitcoin accounting for more than $20 billion of the losses.
Potential for a Bull Trap?
Despite the heightened fear, analyst Michael Pizzino suggested in a YouTube video that BTC is trading significantly above past cycle lows. He posits that the current situation might represent “the turning point Bitcoin and crypto have been waiting for,” as he described on social media.
Future Market Indicators
Looking forward, traders are keenly watching upcoming U.S. macroeconomic data. The September Purchasing Managers’ Index (PMI) readings and weekly jobless claims, scheduled for release on September 30 and October 2, respectively, could influence the Federal Reserve’s next steps. These data releases might either rejuvenate risk appetite or increase pressure, testing whether the recent downturn is merely a pause in the bull cycle or the onset of a more significant correction.
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