Cryptocurrency
Is the Bitcoin Price in Danger of Dropping to $42K? Here’s a Worrying Scenario
What a difference a couple of days makes, from bullish ‘Uptober’ momentum to bearish price predictions.
Bitcoin slumped around $4,000 in the wake of the Iranian missile attack on Israel, and negative sentiment has seeped back onto crypto social media.
However, zooming out shows that BTC is still within its range-bound channel, which has continued for the past half a year.
A Fall to $40K Possible?
On Oct. 2, ITC Crypto founder Benjamin Cowen painted a very gloomy picture based on historical price action following Federal Reserve interest rate cuts.
Bitcoin rallied for two weeks following the first rate cut in 2019. However, it then tanked to the 100-week moving average in the months that followed.
If history rhymes, a similar fall to the same technical indicator would put BTC prices back at around $42,000 by mid-November, he said.
Just to offer a different view to consider other than the “up only” view mostly shared on this platform, in 2019, #BTC rallied for 2 weeks after the 1st rate cut, then dropped to the 100W SMA 2 months later, which would correspond to mid-November. pic.twitter.com/ogicF89JrM
— Benjamin Cowen (@intocryptoverse) October 2, 2024
However, the suggestion does not take into account that 2019 was the middle of a bear market, and it was not a halving year, which makes a difference.
Nevertheless, other analysts also suggested something similar but provided no rationality, later describing it as a ‘shitpost.’
This was the $BTC test dump for 40k. Bearish. pic.twitter.com/vbmszAMHmb
— Altcoin Sherpa (@AltcoinSherpa) October 1, 2024
As market analyst Miles Deutscher pointed out in a post on X on Oct. 1, there are plenty of reasons to remain bullish.
Increasing global liquidity through M2 money supplies, rate cuts, which are usually good news for riskier assets, China’s economic stimulus measures, an approaching US election where crypto is a focus, and a traditionally bullish period for crypto in Q4 are some of them.
On Oct. 2, ‘Ash Crypto’ told his 1.1 million X followers that this was “a big shakeout.” He added that October will start with a dump, and we will see a sideways chop for most of the month before things lift off.
Miner Profitability Slumps
Nevertheless, Bitcoin miners may have a reason to be bearish. According to JPMorgan analysts, Bitcoin mining profitability hit a recent low in September.
Daily block reward gross profit decreased 6% month-over-month in September, marking the third consecutive month of decline. The drop in revenue has been largely attributed to the Bitcoin halving event in April. However, transaction fee revenue for the month was only $13.86 million, observed Colin Wu.
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XRP seems to have found support around 50 cents. Can buyers push the price higher this week?
Key Support levels: $0.50
Key Resistance levels: $0.54, $0.68
1. Price Finds Support
After a sharp fall last week, bulls appear to be back. XRP opened this Monday in green and is keen to return on an uptrend. As long as the key support at 50 cents holds, buyers have a good chance to return on the offensive.
2. Sellers are Retreating
Early October saw a spike in sell volume, but now sentiment across the market is improving, which could see the momentum shift back into the bulls’ favor. If so, buyers can aim to take XRP back above 60 cents. However, once there, sellers could return, as in late September.
3. MACD Momentum Shifting
After a difficult start this month, the momentum on the daily MACD is showing the first signs of a reversal, with a histogram making higher lows. If this trend continues, buyers could soon take over the price action and push XRP to break higher again.
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The price of Bitget’s BGB token unexpectedly dropped by 50% on the morning of October 7 before beginning to recover.
The platform has announced that it will compensate users for any losses resulting from the sudden volatility, which is still under investigation.
Exchange Promises Full Compensation
According to CoinGecko data, the incident saw the token’s value fall from $1.14 to $0.64 before staging a quick recovery. In a post on X, Bitget addressed the situation, saying, “BGB experienced unexpected volatility today due to market conditions, but the price has quickly stabilized.”
The platform reassured its users, promising to fully compensate for any asset losses. It also announced that a detailed compensation plan would be released within 24 hours, with the entire process set to be completed within 72 hours.
Bitget CEO Gracy Chen reiterated this message in a separate X post:
“The incident is still under investigation, but I want to assure everyone affected that we will not let any Bitget users suffer losses.”
Chen emphasized that Bitget’s overall standing remains strong, noting that the platform achieved a global market share of 11% in the third quarter of 2024, making it the fourth-largest exchange globally. Additionally, it boasts an asset reserve exceeding 176% and holds the second-largest protection fund globally, which is designed to compensate users quickly in the event of such incidents.
The Nature of Flash Crashes
Meanwhile, this incident mirrors a past development that occurred earlier this year with OKB, the native cryptocurrency of the OKX exchange. The token faced sudden price collapses, falling from a high of $48 to $25 within hours. The event was reportedly triggered by several large leveraged position liquidations, leading to further sell-offs and price declines.
At the time, OKX responded by reassuring its users that it would compensate them for the losses incurred from the unusual liquidation. While OKB’s crashes were linked to market-wide volatility, Bitget has yet to pinpoint the exact cause behind today’s event.
A cryptocurrency “flash crash” occurs when several holders rapidly sell a specific crypto asset, surpassing buyer demand and causing the price to drop sharply in a short amount of time. Unlike a typical collapse, the price usually recovers quickly, often returning to a level close to where it started.
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[PRESS RELEASE – Dubai, UAE, October 7th, 2024]
On October 22-23, the Blockchain Life 2024 forum will take place in Dubai. Over 10,000 participants from 120 countries will come together for the crypto event to share industry insights on the eve of Bull Run 2025.
Participants will hear from leading voices in the blockchain space, who will share market analysis on market trends and potential future developments.
Confirmed figures include:
- CEO Tether – Paolo Ardoino
- Co-Founder Animoca Brands – Yat Siu
- CEO Ledger – Pascal Gauthier
- CEO Cardano Foundation – Frederik Gregaard
- CEO Dubai Blockchain Center – Dr. Marwan Alzarouni
- Co-Founder Litecoin Foundation – Xinxi Wang
- CEO Vechain – Sunny Lu
- CEO of dYdX Foundation – Charles d’Haussy
- Founder Listing.Help, Jets Capital – Sergei Khitrov
- Founder DWF Labs – Andrei Grachev
- Co-Founder Tezos – Arthur Breitman
- CEO Trust Wallet – Eowyn Chen
- Co-Founder Osmosis Labs – Sunny Aggarwal
- Co-Founder of Sui (Mysten Labs) – Kostas Chalkias
- Head of Investments at Maelstrom Fund – Akshat Vaidya
- Founder Notcoin – Sasha Plotvinov
- Co-Founder, CEO Celestia Labs – Mustafa Al-Bassam
- Google Cloud – Tiago Henriques
- Program Lead MetaMask – Zied Brini
In addition to the lineup of speakers, Blockchain Life 2024 is also set to include behind-the-scenes discussions that will provide an opportunity for networking and exchanging information on the latest advancements in the sector.
The forum is coming soon. Readers can purchase tickets with a 10% discount using promo code chainwire.
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