Bitcoin’s price took a substantial dip to $104,500 due to renewed anxieties regarding credit pressure on US regional banks. A cascade of bankruptcies in the auto industry has raised alarms, leading to concerns of a wider market downturn.
Key Highlights:
- Stress among US regional banks impacted markets as bankruptcies in the auto sector unveiled precarious lending.
- Bitcoin’s value fell below the 200-day Simple Moving Average, hitting $104,500, amid $1.2 billion in liquidations.
- Analysts suggest $88,000 could be the next critical support for BTC if it can’t maintain above $104,000.
Bitcoin’s decline was triggered during New York trading hours on Thursday, when investors adopted a more cautious stance, coinciding with declines in equities and a rise in bond prices.
A fresh all-time high for gold added to the market’s unease. Recent financial turmoil was exacerbated by First Brands Group, an auto parts supplier, and Tricolor Holdings, a subprime auto lender, both filing for bankruptcy at the end of September.
The failures pointed to hazardous lending trends, sparking fears of contagion in financial markets. Stock prices for Zions and Western Alliance plummeted by 13% and 11%, respectively, following news of significant losses attributed to bad loans.
As a consequence, the S&P 500 fell 0.63%, while the Dow Jones dropped by 0.65%.
Major Liquidations
On Friday, Bitcoin’s sell-off heightened, broadening the margin from its recent peak of $126,000 with expansive liquidations in the derivatives arena. Over $935 million in long positions were liquidated, including $317 million in Bitcoin alone. In total, the market absorbed $1.19 billion in liquidations.
Bitcoin’s liquidity issues around $105,000 signal a potential for further declines unless it finds urgent support.
“No reversal in sight at the moment for $BTC,” stated analyst Block_Diversity amidst the panic.
It remains to be seen how low Bitcoin can rally before stabilization occurs. The bravest investors may view current lows as an accumulation opportunity. However, this analysis is devoid of investment advice; individuals should assess their financial situation carefully.
