Bitcoin (BTC) fell back to $69,900 today after reaching $73,400, although it has already regained the $70,000 mark. Despite the fluctuations, there are signs that it can advance towards $80,000, supported by technical and market factors.
According to Colombian investor and analyst Juan Rodríguez, despite the volatility, Interest in bitcoin continues to grow, marking a solid path in the market.
The decline that took bitcoin to $69,000 responded largely to the decline in risk markets. The reason: recent reports from large companies did not meet projected expectations, which affects confidence in the markets for the coming quarters.d
Furthermore, the employment situation in the United States contributes to the uncertain environment, Rodriguez explained. in its analysis through the social network YouTube.
The specialist points out that, although bitcoin has been above $70,000 for 37 days, it closed above that figure only in 17 days.
In contrast, the range between $60,000 and $70,000 has seen greater stability with 234 trading dayswhile the range from $50,000 to $60,000 totaled 399 days. “It is better to advance with pauses, this way sudden corrections are avoided,” Rodríguez points out.
A shared decline in the market
The decline in bitcoin is not unique. In the short term, both the Nasdaq and the S&P 500 have recorded declines.
Tech stocks, such as Microsoft and Nvidia, fell 5% recently. This environment occurs in a context of general volatility, caused, in part, by the presidential elections in the United States and the macroeconomy of that country.
Charles Edwards, founder of the Capriole Investments firm, comment that The S&P 500 has historically marked a minimum in the last week of October before elections.
Historically (excluding the period 2000-2008), the S&P 500 tends to reach its lowest point in the last week of October, just before the presidential election.
After hitting bottom, the market, according to this historical observation, usually experiences a rebound or recovery that lasts for several years.
What caused the fall?
According to Rodríguez, macroeconomic factors in the United States, particularly in employment, generate uncertainty. For the Colombian analyst this is one of the “weak legs” of the US economy.
In the last week of October, the number of people who applied for unemployment benefits in the United States was 216,000, while the forecasts were 230,000, as seen in the following graph.
This is a generally positive sign. With fewer people looking for jobs, it suggests companies are hiring and retaining workers.
However, available vacancies fell, affecting the labor market. The number of job offers decreased by 418,000, from 7.8 million in August to 7.4 million in September 2024.
This figure is below market expectations, which were 7.99 million. This is the lowest level since January 2021.
Market analyst Daniel Muvdi duck that the Purchasing Managers’ Indices (PMI) show signs of contraction, especially the Chicago PMI, which measures manufacturing activity and currently stands at 41.6, a value below expectations.
These are economic indicators that measure the activity of the manufacturing and service sectors. A PMI above 50 indicates expansion, while one below 50 signals contraction.
“The deterioration is evident, and unemployment in the manufacturing sector continues to grow at accelerated rates,” says Muvdi.
When some negative data came out in the labor sector in the United States, a brief correction of bitcoin was generated in the market
ETFs and futures: the drivers of bitcoin
Although the short-term uncertainty is notable, Bitcoin spot ETFs in the United States are emerging as a favorable counterweight.
These instruments have shown outstanding performance in October, the second best month after March, when bitcoin reached its all-time high, as can be seen in the following graph.
The ETF holdings, together, now exceed one million BTCsomething that, according to Rodríguez, was not expected in such a short time, achieving this milestone in just 10 months since its launch on the stock market.
The iShares Bitcoin Trust (IBIT) fund, managed by BlackRock, is the leader among ETFs. The financial instrument manages more than 429,000 BTC, valued at $30 billion. This can be seen in the following graph.
«IBIT reached this milestone in just 293 days, a historical record», express ETF specialist, Eric Balchunas. The previous record was held by other major ETFs such as JPMorgan Equity Premium Income (JEPI) which did it in 1,272 days and SPDR Gold Trust (GLD) which did it in 1,790 days, he added.
IBIT’s performance has been remarkable. Last Wednesday it registered a net inflow of 872 million dollarsa daily record for the ETF. The highest inflow was $848 million last March, as seen in the chart below.
The good performance of ETFs will be one of the great drivers of bitcoin in the market. «If the demand for bitcoin continues to grow in the medium and long term, yes, it must go up. In the short film many things can happen like the current ones,” says Rodríguez.
On the other hand, positions in bitcoin futures on the Chicago Mercantile Exchanges (CME) have grown in the last five days, with expectations that point to a price between 80,000 and 85,000 dollarsas seen in the following graph.
For Rodríguez, this projection points to a target of $80,000 around November 8, just after the presidential elections in the United States.
Bitcoin and the elections in the United States
Investors’ bullish outlook is a reflection of what they anticipate as a possible victory for Donald Trump in the November 5 elections. This is because the Republican candidate would promote bitcoin and other cryptocurrenciessince it has promised favorable regulations for the sector, as reported by CriptoNoticias.
Trump focuses part of his campaign on the growth of digital assets, offering a regulatory framework that could benefit bitcoin and cryptocurrency mining.
Thus, the price of bitcoin seems prepared to face both short-term ups and downs as well as events that could consolidate its rise towards $80,000backed by solid fundamentals and growing investor interest.
