Bitcoin’s recent performance has raised concerns among investors, with charts forecasting a potential decline to $103,800, and possibly falling below the crucial $100,000 mark in the short term. The cryptocurrency’s price action has mirrored broader market trends, experiencing significant sell-off pressure that saw Bitcoin tumble to $107,328 shortly after trading began in New York, followed by hitting an intraday low of $106,800.
This downturn coincides with a slight weakening of the US stock markets, where both the S&P 500 and Nasdaq recorded modest losses. Interestingly, this occurred despite better-than-expected third-quarter earnings reports from major technology firms, commonly referred to as the “Magnificent Seven.” Heavyweights like Meta and Microsoft faced substantial share price drops of 10% and 3%, respectively. Investor sentiment appears to be clouded by skepticism regarding the scale of capital expenditures allocated by these Big Tech companies toward artificial intelligence (AI) infrastructure.
Meta recently announced that its capital expenditure on AI is now projected to be between $70 billion and $72 billion, while Alphabet has outlined a forecast of up to $93 billion dedicated to its AI initiatives. Such investments have elicited doubts about whether the market is becoming overly speculative amid inflated valuations.
Meanwhile, the market’s response to political developments, particularly around US-China trade relations, remains tepid. Despite a generally positive narrative from former President Trump regarding his discussions with Chinese President Xi Jinping, there are scant details concerning the outcomes of their meeting. The limited information—including a minor cut to fentanyl-related tariffs and a one-year delay on China’s ban on rare earth exports—has left many investors wary, with the US-China trade war continuing to loom as a significant risk factor.
These dynamics have led to a lackluster performance for Bitcoin, surprising many investors who expected a rally if there were confirmations of a Trump-China trade deal, accompanied by a 25 basis point cut to interest rates from the Federal Reserve and the cessation of quantitative tightening by the end of October. Current indicators suggest that the path of least resistance for Bitcoin is tilted toward the downside, with liquidation heatmap data from Hyblock indicating that immediate liquidity levels lie around $103,800. Moreover, long liquidity positions can be detected at $100,500 and $98,600 based on a one-month lookback period.
As always, it is essential for individuals to conduct their research and exercise caution, as every investment and trading move carries inherent risks.
