In general, financial markets are going through good times.
When bitcoin is freed from these ghosts, the bull run could return.
In early October, bitcoin (BTC) marked an all-time high (ATH) of $126,000, and there was strong enthusiasm in the market for the asset to cross the $130,000 barrier.
However, on October 10, There were tensions between the United States and China, which caused an abrupt drop in prices. On that occasion, President Donald Trump shared a message through his Truth Social account to warn that his government was evaluating a “massive increase in tariffs” on Chinese products.
That publication was powerful enough to reignite fears of a trade war between the world’s two largest economies.
Since then, bitcoin price struggles to stay above $90,000as seen below:
Analysts at Bybit, a cryptocurrency exchange, point out that BTC is still marked up so they call “the ghosts of October 10.”
The term is used to refer to a historic day in which the market suffered an abrupt and unprecedented shock. This left a psychological mark that still influences investor behavior.
As reported by CriptoNoticias, prices suffered abrupt falls that caused heavy losses for leveraged traders and generated a significant increase in fear in the market.
According to data from the CryptoQuant explorer shared by analyst MartyParty, the largest daily liquidation of bullish positions in history was recorded. In total, more than 14,000 positions forcibly closed, surpassing even the peaks seen during crypto winter and the bankruptcies of FTX and Celsius in 2022.
Almost two months after “Black Friday”, unlike traditional markets that show notable bullish momentum, with the S&P 500 near all-time highs and assets like Apple, Walmart and gold on the rise, BTC remains contained.
In other words, this discrepancy in asset returns makes it clear that Investor confidence in the digital asset market is still affected for the aftermath of that day. When BTC frees itself from these ghosts, a new bull run could return.
An event that can help allay these fears is an interest rate cut by the United States Federal Reserve (FED). This December 9, the meeting of the Federal Open Market Committee (FOMC) will be held to define the economic policy of the main global financial power.
The market takes for granted that the Federal Reserve, led by Jerome Powell, will apply a cut of 25 basis points in interest rates.
Historically, BTC has reacted positively to these types of measures. A reduction in interest rates decreases the cost of borrowing money, facilitating the entry of liquidity into financial markets.
This injection of liquidity could be beneficial for assets considered risky, such as BTC and cryptocurrencies.