bitcoin and other cryptocurrencies are in a six-day downtrend, with bitcoin losing 1.5% in a 24-hour period on Thursday to fall below $26,750. The decline contrasts with recent advances in risk-sensitive assets and diverges from gains seen in stock market indexes such as the Dow Jones and the S&P 500. A late September rally raised hopes of a bullish rally toward the $30,000 mark, but that enthusiasm has faded due to potential conflicts in the Middle East or general disinterest in Bitcoin.
The upcoming US CPI inflation data could either push Bitcoin above $27,000 or further consolidate its position in the $26,000 range. Despite expectations that the Federal Reserve will not raise interest rates again to deal with inflation, cryptocurrencies remain untouched. Other digital currencies such as Ether, Cardano, Polygon, Dogecoin and Shiba Inu are also showing losses.
Interestingly, Bitcoin typically rises by 1% on Friday the 13th and continues to rise by an average of 14% and 66% over the following month and three months, respectively. That's in stark contrast to the S&P 500's bearish performance on that date, according to data from Matrixport.
However, Markus Thielen warns of a possible crypto market correction due to Ethereum revenue generation challenges caused by limited DeFi activity and reduced NFT mining. It points out that the price of Ether is nearing its September lows with possible significant liquidation of leveraged positions if key support is broken. This could lead to a deeper decline towards $1,430 with market-wide implications. In addition, Thielen identifies signs of weakness in the crypto markets, including Bitcoin's breakout from its September bullish trend line and potential negative shifts in sentiment.