Where is the Cryptocurrency Market Heading?

Research is the cornerstone of our approach and we attach great importance to it. This extensive research allows us to time things strategically, making it easier for us to make informed decisions about the best buying moments. Especially when deciding what to buy and when not to buy. Cryptocurrency expert Abhay H gives a comprehensive assessment of where the market will be in a few months.

Where will we be in the short term?

In the annals of Bitcoin, October has traditionally emerged as a strong month for the crypto market. So, we affectionately called it “Uptober.” Despite the understanding that historical patterns do not repeat in the same way, reassurance from such trends remains. However, the ongoing Israel-Hamas War looms as a potentially significant disruption.

Currently, the leading cryptocurrency Bitcoin is in an upward phase and is hovering around the $34,000 mark. cryptokoin.comAs you follow from , this move follows the spread of misinformation regarding the SEC greenlighting the first Bitcoin spot ETF. The inaccurate report initially caused a stir in markets early Monday. But as the truth emerged, it triggered a decline in Bitcoin’s value. However, Bitcoin quickly passed the 30 thousand level and continued its rise.

Why did the cryptocurrency market rise and fall?

In the early hours of Monday, October 16, Bitcoin experienced a rapid rise and approached the $ 30,000 level. The catalyst was a post from a crypto news site claiming that a spot Bitcoin ETF had been approved. This misinformation led to the liquidation of over $100 million in just a few hours. Contrary to the initial claim, a check on the SEC website revealed that there is no approval for a spot Bitcoin ETF. Bloomberg also reported that BlackRock’s application is still under review.

Therefore, BlackRock and other reliable sources immediately denied the claim, proving it to be false. Cointelegraph later apologized for the tweet, acknowledging its role in spreading misinformation. But now we know Spot ETF news is around the corner and what to expect from it.

Price drop and skepticism in the cryptocurrency market

Although Cointelegraph deleted the incorrect post approximately 30 minutes later, its impact remained. Bitcoin’s value fell from $30,000 to $28,000 after analysts and reporters became skeptical of misleading information. CoinGlass data reveals that $81 million worth of short positions and $31 million worth of long positions were liquidated during the move towards $30,000. The correction significantly affected traders. Because, in the last 24 hours, 39,106 of them faced liquidation with a total amount of 186.62 million dollars.

Source: Coinglass

Positive aspects: Increased on-chain activity

Recent on-chain data points to a surge in Bitcoin holdings among long-term investors, reaching record levels. Simultaneously, Ethereum experienced a significant decrease in gas usage. Additionally, it accelerated Ether inflation. Bitcoin’s dominance in overall cryptocurrency market capitalization has expanded with gains relative to ETH.

Negativities: US CPI and Geopolitical tensions

Inflation figures announced in the USA last week caused fluctuations in the markets. It also caused a significant backlash despite figures coming in slightly above expectations. The headline Consumer Price Index (CPI) recorded an annual increase of 3.7%. Thus, it was slightly above the expectation of 3.6%.

The main driver behind this increase continues to be housing costs. Core CPI excluding housing remains below 3%. The high reaction of the markets to the CPI data indicates that concerns are increasing due to the escalating geopolitical tensions in the Middle East.

Dominant concern: Impact of Israeli conflict on global dynamics

The biggest concern right now, overshadowing other macro factors like interest rates and GDP, is the ongoing war in Israel. This macroscopic element has the potential to profoundly influence various aspects. That’s why it has a weight that surpasses all others. At the macro level, escalation of conflict could disrupt oil and gas supply chains, leading to an increase in inflation.

In the context of the crypto factor in this geopolitical turmoil, mainstream media have presented narratives of how different organizations are using cryptocurrencies to fund Hamas. If the conflict escalates to include other militant groups, it would not be unexpected to witness similar narratives implying the use of cryptocurrency in financing these groups. It is possible that such a scenario could trigger sanctions against leading crypto assets.

Regulatory repercussions for cryptocurrencies

Sanctions are not the only concern. Because the recent actions of countries like Pakistan and Kuwait, which banned crypto as per the directive of the Financial Action Task Force (FATF), set a precedent. Other Middle Eastern countries may find themselves forced to take similar measures in light of recent revelations. The UAE, in particular, is already in a precarious position before the FATF, having been placed on the Gray List early last year.

Reversal of pro-crypto trends

This potential chain of events has the potential to change the pro-cryptocurrency trend observed in the Middle East. It is possible that this could somewhat reverse the positive effect. Some Gulf countries have actively sought to establish themselves as crypto hubs. Even Saudi Arabia has explored crypto regulations. Abandoning these goals is likely to cause significant damage to the crypto industry.

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