Major Stocks Dip 5% Amid Profit-Taking; Gold Retracts
Major cryptocurrencies experienced a significant decline as profit-taking activities impacted market sentiment. The market is currently facing its worst October since 2015, with major tokens slipping by up to 5% at the week’s outset.
Market Overview
Bitcoin, trading around $107,541.60, hovered just below the $106,000 mark after briefly surpassing $110,000 last week. Meanwhile, other major tokens also recorded losses:
- Dogecoin: -5%
- Cardano (ADA): -5%
- Solana (SOL), Binance Coin (BNB), and Ethereum (ETH): up to -4%
- Tron (TRX): Flat movement
This downturn followed a recent uptrend in prices, indicating potential profit-taking among investors over the weekend.
Analyzing Market Sentiment
Traders noted the absence of immediate catalysts and weak perceived fundamentals, which are negatively affecting market sentiment. According to Alex Kuptsikevich, chief market analyst at FxPro, bitcoin’s inability to maintain levels above $113,000 signals waning momentum. The total market capitalization for cryptocurrencies remained around $3.5 trillion, consistently drawing in dip-buyers.
Kuptsikevich suggested that the commencement of a new month could invigorate buyers. However, the initial promise of October, known as “Uptober,” was quickly overshadowed by declines.
Long-term Investor Behavior
Data from Glassnode indicates long-term holders are increasingly selling their bitcoin holdings as market conditions shift. The volume of bitcoin sold by long-term investors has tripled since June, as those who purchased near $93,000 have taken profits.
Despite the downturn, trading volume surpassed $300 billion in October, indicating robust two-way liquidity in the market.
Gold Market Dynamics
In related developments, gold prices stabilized around $4,000 per ounce after experiencing a pullback caused by China’s decision to end tax rebates for certain gold retailers. This policy change, announced over the weekend, may weaken demand in one of the globe’s largest bullion markets.
Although gold’s recent rally was fueled by retail interest and central bank acquisition, prices remain over 50% higher year-to-date, demonstrating continued haven demand amidst macroeconomic and geopolitical tensions.
Bitcoin and Gold Correlation
The relationship between bitcoin and gold has evolved, with both assets responding similarly to shifts in monetary policy and geopolitical events. The Federal Reserve’s recent decision to pause its tightening measures, coupled with the potential for lower capital costs, may eventually bolster demand for risk assets like bitcoin. Nevertheless, current trading trends suggest that investors are cautious, balancing safety with speculative opportunities.
