Bitcoin (BTC) has recently declined, testing the $60,000 support level after notable outflows from the US BTC-spot ETF market. Employment data and geopolitical tensions impact market sentiment, with crucial economic indicators on the horizon that could affect future price movements. Investors are advised to monitor these developments closely as Bitcoin’s trajectory remains uncertain.

On October 2, Bitcoin (BTC) experienced a minor decline of 0.33%, following a more substantial dip of 3.93% the previous day, ultimately closing at $60,671. The cryptocurrency’s journey included a drop to a low of $60,030, thereby testing the critical support level at $60,000. This downturn contributed to a broader 1.17% decrease in the total cryptocurrency market capitalization, which now stands at $2.065 trillion. On the prior day, the US BTC-spot exchange-traded fund (ETF) market faced significant net outflows totaling $242.6 million, marking the end of an eight-day streak of inflows. Notably, BlackRock’s iShares Bitcoin Trust (IBIT) stood out as the sole ETF to record inflows on that day. As of October 2, the US BTC-spot ETF market continues to rely substantially on IBIT to counter the outflows from other issuers—such dynamics play a critical role in influencing the supply-demand balance for Bitcoin. According to Farside Investors, excluding IBIT and Bitwise Bitcoin ETF (BITB) flows, net outflows from the US BTC-spot ETF market reached $39.2 million. The ongoing sentiment in the market is being shaped by expectations surrounding the Federal Reserve’s interest rate trajectory and geopolitical tensions in the Middle East, both of which are exerting pressure on demand for US BTC-spot ETFs. Furthermore, the ADP report released on Wednesday indicated that employment increased by 143,000 in September, up from 103,000 in August, thereby bolstering expectations of a smoother landing for the US economy. However, this employment data also tempered speculations regarding a 50-basis point rate reduction in November, leaving investors wary of riskier assets. According to the CME FedWatch Tool, the probability of a 50-basis point rate cut has declined from 36.8% on October 1 to 34.6% on October 2. While this ADP report affects sentiment regarding rates, the forthcoming official US Jobs Report is anticipated to hold significant weight. Positive labor market data could reinforce the case for a smaller 25-basis point rate cut in November, while an extended rate path may keep yields high, negatively influencing buyer interest in riskier assets. Additionally, rising tensions related to the Middle East conflict may pose another challenge for BTC, with further escalations threatening to push the cryptocurrency under the $60,000 threshold. On the same day, the US equity markets showed modest gains, with particular attention directed towards developments in the Middle East and the US labor market, including a slight rise of 0.04% in the Nasdaq Composite Index. Upcoming economic indicators such as US initial jobless claims and ISM Services PMI scheduled for October 3 could influence demand for US BTC-spot ETFs. A significant increase in jobless claims or softer service sector activity may stir renewed speculation surrounding a potential 50-basis point Fed rate cut, potentially driving BTC towards the $65,000 mark. Conversely, should these indicators reflect a concerning trend, BTC could revisit the $55,000 level. Traders are advised to remain vigilant regarding important economic data and ongoing geopolitical developments, particularly in relation to ETF flows which are anticipated to significantly impact short-term demand for BTC and the wider market. Bitcoin remains positioned below the 50-day Exponential Moving Average (EMA) but above the 200-day EMA, which could indicate bearish short-term signals but bullish tendencies for the longer term. A surge past the 50-day EMA could propel Bitcoin towards resistance levels of $64,000 and subsequently to $65,000, possibly reintroducing the September 27 high of $66,520 into consideration. If Bitcoin fails to maintain support above $60,365 and the 200-day EMA, it may descend towards $57,500, with risks of extending towards $55,000. In contrast, Ethereum (ETH) remains significantly below both the 50-day and 200-day EMAs, affirming its own bearish indicators. A breakout above the resistance of $2,403 may lead ETH towards the 50-day EMA, while a fall below $2,250 could drive it towards the $2,124 support level.

Bitcoin (BTC) has recently been under pressure, navigating the crucial support level at $60,000. The recent fluctuations in its price coincide with broader trends in both the cryptocurrency and equity markets, coupled with critical economic indicators affecting investor sentiment. The performance of Bitcoin is also significantly influenced by developments in the US BTC-spot ETF market, which is experiencing notable outflows that influence the supply-demand dynamics. As market participants assess the implications of imminent employment data and geopolitical tensions, Bitcoin’s trajectory remains uncertain. The ability of Bitcoin to maintain above vital support levels will depend on a range of factors including ETF flows, Federal Reserve policies, and broader economic trends.

In summary, Bitcoin is currently testing a key support level at $60,000 amidst declines triggered by moderate outflows from the US BTC-spot ETF market and changing economic sentiment surrounding the Federal Reserve’s rate path. The upcoming economic data, particularly the US Jobs Report, could significantly influence market perceptions and demand for Bitcoin. Investors are advised to closely monitor ETF inflows, economic indicators, and geopolitical developments as they navigate this volatile environment. Maintaining a position above key support could see Bitcoin attempt to reclaim higher resistance levels, while a breach could signal deeper declines.

Original Source: www.fxempire.com

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