Contrary to what Cryptocurrency enthusiasts expected, the month of October begins with a downward trend for this market. In this work, we review the main factors that force Bitcoin to retreat during the last hours. In parallel with BTC, the rest of the altcoins are also moving in a bearish trend this Tuesday.
Since early hours, the largest cryptocurrency has shown a downward trend that worries investors. In fact, the correction began on Monday, but this Tuesday it was accentuated due to various news that impacted the market mood. The first of these elements has to do with tensions in the Middle East.
As Israel escalates its war aggressiveness and invades Lebanon, U.S. officials fear it is testing Iran’s patience. According to the CNBC portal, the Persian authorities are preparing an imminent missile attack on Israel, which would surely unleash a large-scale war in the region. The consequences of a scenario like this would be strong for the markets.
As expected, this fact caused immediate fear among risk investors, who liquidated assets en masse this Tuesday. Thus, geopolitical tensions are one of the main factors forcing Bitcoin to retreat in recent hours.
Manufacturing PMI data also pushes back Bitcoin
Although geopolitical tensions are a very important factor in the decline in equities this Tuesday, they are not the only ones. During this same day, the S&P Global manufacturing PMI data in the United States was released. Thus, the score for this data during September was contraction, which generates fear among investors.
Over the past month, the manufacturing sector scored 47.3 from 47.9 in the previous report. Basically, figures below 50 points reflect contraction, while above that mark represent expansion. This is the worst performance in the sector over the last 15 months.
The decline in manufacturing PMI indicates a decline in orders to companies. As a consequence, this gives way to layoffs and reductions in input purchases to compensate for the lack of productivity. As you can see, this is a very important index to measure the health of the economy. Thus, the fact that it is in contraction once again unleashes fears of recession.
Despite the latter, some remain optimistic and consider that this decline in the manufacturing sector is temporary. In that sense, it would be linked to the traditional disorder generated by the periods leading up to presidential elections in the United States. Either way, this is one of the factors currently forcing Bitcoin to drop in price.
Bitcoin price starts October with a downward trend. Source: CoinMarketCap
The BTC price reaction
As mentioned at the beginning, the month of October does not start as enthusiasts of this digital currency expected. For weeks now, they have been celebrating the approach of a historically bullish month. Since Bitcoin existed, October became a period of attraction for investors, contrary to September, which was always bearish.
On this occasion, the price of BTC improved in September, but on this first day of October it falls. At the time of writing this note, its price is $62,700 and remains highly volatile, according to data from CoinMarketCap.
Although it is still too early to say that the upward trend of Uptober (bullish October) will not be fulfilled, the elements that cause this fall make us fear the worst. Will Iran attack Israel? Will the contraction in the various US macro data continue? These two pieces of information will have much more weight than the historical behavior reflected in the graphs.
Disclaimer: This work is for informational purposes only and should under no circumstances be taken as an invitation or investment advice. Cryptocurrencies are highly volatile assets and placing capital in them can lead to total losses.
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