The cryptocurrency market experienced a slight dip over the weekend, with Bitcoin trading around $107,500 after a 2.2% decrease, as investors await key US jobs data and consider Treasury Secretary Scott Bessent’s comments about potential interest rate cuts amid economic pressures in sectors like housing.
The digital asset dropped below the $108K mark, reflecting cautious sentiment among investors ahead of the US jobs report.
Ethereum fell 3% to approximately $3,750, while other altcoins performed poorly amid low trading volumes.
Federal Reserve policies, as highlighted by Treasury Secretary Bessent, are straining the economy and raising the chances of rate cuts that could increase market volatility. The digital asset was trading near $110,000 on Sunday evening, down 9.4% from October 10.
Analysts’ perspective
On-chain analysts say the crash on October 10 caused a loss of momentum, which explains Bitcoin’s poor performance. About $19 billion in leverage was removed from the derivatives market after this event, depleting the main driver of the recent rally.
Crypto experts have offered varied responses to Treasury Secretary Scott Bessent’s recent remarks in an interview, where he suggested that the Federal Reserve’s restrictive monetary policy might have triggered a recession in industries like housing. Bessent argued that higher borrowing costs increase economic strain, especially for highly leveraged households, and that the central bank now has more room to lower interest rates.
This initially led to a rise in cryptocurrency prices in anticipation of more liquidity, but the gains faded as traders reassessed the risk of cuts caused by slowing economic activity rather than strong growth, according to data from on-chain analytics companies. Market analysts indicate that Bessent’s caution could signal a move toward more relaxed policies, though they also point out vulnerabilities in the overall economy.
According to a recent report by Glassnode, Bitcoin’s failure to surpass the $113,000 cost basis for short-term holders’ underscores waning bullish momentum.
This level has acted as resistance for three weeks after months of rising trading volume. Analysts forecast a potential decline toward $88,000 support based on realized price metrics for circulating supply, which have historically capped declines in previous cycles. This level distinguishes the potential recovery from further corrections.
The cryptocurrency market’s failure to respond to clearly positive news indicates a significant slowdown in its upward trend. The Federal Reserve meeting and the key summit between Chinese President Xi Jinping and US President Donald Trump occurred during this period. China met three major US demands, including resuming US soybean imports and delaying restrictions on rare earth element exports for one year.
The US-China summit provided important clarity. As part of the agreement, the United States agreed to reduce the overall tariff rate on Chinese goods from 57% to 47%. The leaders also agreed to exchange visits next year.
The Nasdaq 100 Index, a key indicator for risk assets, dropped about 2.7% from its October 10 low. This rise was supported by easing geopolitical tensions and strong corporate earnings. However, Bitcoin’s value has dropped sharply.
Bitcoin’s outlook
BTC faces a greater meltdown if it continues to correct and closes below the 61.8% Fibonacci retracement level at $106,453. It may then continue to drop toward the October 10 low of $102K. Bitcoin’s 78.6% Fibonacci retracement level, derived from the April 7 low of $74.5K to the October 6 all-time high of $126.2K.
The Relative Strength Index (RSI) is at 43, below the neutral level of 50, indicating that bearish momentum is intensifying.
The Moving Average Convergence Divergence (MACD) lines are also converging with decreasing green histogram bars indicating waning bullish momentum. The recovery could extend toward the 50-day EMA at $112,550 if Bitcoin finds support near the 61.8% Fibonacci retracement level at $106.5K.
