Major cryptocurrencies experienced a downturn at the beginning of the week, with losses reaching as much as 5% and continuing a downward trend that has marked one of the worst Octobers for the market since 2015. Bitcoin was trading around $106,000 after having briefly retrieved the $110,000 mark just a week prior. Notably, Dogecoin and Cardano’s ADA led the decline among major tokens, each plummeting by 5%. Other significant cryptocurrencies, including Solana’s SOL, Binance Coin (BNB), and Ethereum, also recorded losses of about 4%. In contrast, Tron’s TRX managed to maintain a flat position over the same 24-hour period.
The market’s slide appeared to occur without any immediate catalysts, suggesting potential profit-taking among traders following a brief uptrend in prices from the previous week. Alex Kuptsikevich, the chief market analyst at FxPro, highlighted that the absence of substantial support might have weighed on market sentiment. He pointed out that Bitcoin’s inability to stay above $113,000 indicated a loss of momentum, as the market continued to trace lower highs, albeit with around $3.5 trillion in total market capitalization attracting dip-buyers.
Looking ahead, there was speculation that the start of a new month might provide a lift for buyers. However, the so-called “Uptober” phenomenon, which typically signifies a positive month for crypto, seemed to have fizzled after an initial boost, leading to a significant downturn.
In response to the market dynamics, long-term holders have begun to increase their selling activity, according to data from Glassnode. The selling by long-term investors has reportedly tripled since June, particularly among those who purchased Bitcoin near the $93,000 mark and are taking profits. Despite this selling pressure, spot trading volumes have exceeded $300 billion in October, marking the highest levels seen in a year, indicative of robust two-way liquidity in the market.
Meanwhile, gold prices stabilized around $4,000 per ounce following an initial drop triggered by a significant policy shift in China. The Chinese government announced an end to tax rebates for specific gold retailers, a decision that could potentially diminish demand in one of the largest bullion markets globally. This announcement coincided with a pullback in gold prices, which had recently surged due to retail enthusiasm and central bank accumulation.
Despite this retreat, gold prices remain more than 50% higher year-to-date, suggesting ongoing demand for safe-haven assets amidst macroeconomic and geopolitical uncertainties. Interestingly, the correlation between Bitcoin and gold, which were previously seen as alternative hedges, has strengthened recently; both assets are increasingly responsive to changes in monetary policy and geopolitical tensions.
As traders navigate the current landscape, many appear to be balancing their considerations between safety and speculation, particularly in light of the Federal Reserve’s recent decision to pause tightening and the potential for cheaper capital, which could, in the future, revive interest in risk assets.
