Crypto market weakness likely short-term

According to analysts, geopolitical tensions in the Middle East loom over Bitcoin and cryptocurrencies, but this will not last long.

Iran’s ballistic missile attacks on Israel caused a sell-off in the market on October 1, with Bitcoin (BTC), Ethereum (ETH), major altcoins, and the total cryptocurrency market losing around 4% in value.

Markets are still under the influence of tensions in the Middle East. Bitcoin traded below $60,500 and market watchers from QCP Capital predicted prices would move lower before the bounce. QCP analysts said that BTC’s technical analysis shows a short-term bearish trend.

Ether also fell below $2,400, according to crypto.news price data, and Solana (SOL) fell below $137. Although October, historically a green month for digital assets, recorded consecutive red days, QCP predicted that current market conditions represent only a brief trend.

Given the strong correlation between crypto and US stocks, we believe this weakness is temporary. As US stocks recover, cryptocurrencies are likely to follow suit. This correlation highlights that macroeconomic factors are currently the main drivers of risky asset prices.

QCP Capital

Expected interest rate cuts and strong US labor market data should drive Bitcoin and altcoins to higher prices, according to an Oct. 3 note from QCP.

Bitget chief analyst reiterates bullish sentiment on cryptocurrency in Q4

Bitget Research chief analyst Ryan Lee agreed with Bitcoin’s bullish thesis in Q4. In an email shared with Crypto.news, Lee noted a 16% decline in trading volume as investors observed geopolitical developments and macroeconomic events.

However, Bitget’s expert also cited CryptoQuant data that shows continued institutional interest in Bitcoin.

According to CryptoQuant, despite the overall crisis, institutional investors continue to purchase digital currencies at a rate equal to or higher than the amount mined daily. Currently, BTC remains above the $60,000 support level and it could fluctuate in the $72,000 range; Expectations of Fed rate cuts and market recovery could come from Bitcoin’s historically optimistic fourth quarter.

Ryan Lee, principal analyst at Bitget Research