Bitcoin deepened its losses this week thanks to a 9% drop in its price to recently settle at around $110,700, after riding out a profit-taking selloff that erased most of its gains a week earlier. This wave coincided with renewed trade tensions between the United States and China and caused a wave of risk aversion that spread across global markets, passing… This is a true test of Bitcoin’s status as a store of value.
Tariffs trigger global sell-off
President Trump’s threats to increase tariffs – expected to be implemented on November 1 – shook the markets and reduced the value of the S&P 500 index by 2%, and the 40-day correlation between Bitcoin’s performance and that of stocks increased by 73%, confirming the strengthening relationship between the crypto sector and the general mood of the financial markets.
Overall, this has led investors to seek safety through traditional hedging assets; As the price of an ounce of gold rose 1.9%, recording its highest level since August at $4,018, while US Treasury bond yields declined alongside investment rotation into defensive hedge assets, revealing Bitcoin’s (Bitcoin) recent setback, revealing investors’ reliance on tangible and safe hedge assets rather than speculative assets, although they are called “digital gold”.
- Global stock markets are experiencing a general decline due to concerns over tariffs.
- The market value of Bitcoin has fallen to $2.1 trillion.
- The strength of gold has created an atmosphere of risk aversion.
Spot trading volumes – year-over-year – also declined by 1.17%, while analysts believe the next direction of Bitcoin price movements will depend on expected US inflation data and Federal Reserve guidance expected this week.
Institutions maintain their bet on blockchain
Institutional activity continues to thrive in the blockchain and digital representation of financial assets sector despite the decline in the price of Bitcoin. The Blue Ocean platform, which provides services to brokerages such as Robinhood and Schwab, announced plans to digitally represent US stocks on the blockchain and turn them into digital assets that can be traded around the clock.
This step is in line with Nasdaq’s proposal to list digitally represented exchange-traded funds (ETFs) on the blockchain. The activities of traditional financial institutions also confirm a trend to integrate blockchain technology into their existing systems. Analysts see this step as an affirmation of lasting confidence in the digital asset technical system despite continued price corrections. in the short term.
Deutsche Bank’s latest report highlighted the similarities between Bitcoin and gold, noting that the latter constitutes 24% of the central bank’s reserves, the highest percentage recorded since the decade 1990-1999. The bank indicated the possibility that Bitcoin will follow this path to reach a similar point by 2030. In this regard, “even if Bitcoin remains volatile and not backed by tangible assets, its correlation with inflation-hedging assets, such as gold, will continue to increase,” wrote strategist Marion Labore in this context.
Another sign of institutional confidence; Nasdaq-listed Aurelion Treasury has revealed that it holds reserves worth $150 million of Tether, a gold-backed stablecoin (Tether Gold-XAUT), in a move that is believed to be the first institutional sector treasury of its kind. The company’s share price rose 19% following the announcement, reflecting investor enthusiasm for the asset. Digital assets whose value is tied to tangible assets.
Bitcoin Price Technical Analysis: Testing the $108,000 Support Floor
The 9% drop in Bitcoin price represents the largest daily pullback since April, and the currency is currently trading near the $108,000-$110,000 support range, while the daily chart shows a breakout of the short-term trendline confirming a temporary change in momentum, while the relative strength index (RSI) reading has stabilized at 39, suggesting a decline. Buyers dominate, while MACD indicators have turned negative, suggesting further temporary declines. The bearish engulfing candle also indicates intensifying selling pressure and the possibility of continued volatility over the following days.
Furthermore, the next important support levels will be in the $103,000 to $98,200 range if Bitcoin price fails – technically – to consolidate above the $108,000 level, as this range represented a significant buying zone in the past, while breaking through the $117,000 barrier could reverse the unpromising trading settings and pave the way for a recovery towards $124,000.
Current moves could be sustained if Bitcoin price can stay above $103,000, and the current correction represents a healthy mid-cycle reset rather than a potential trend reversal. Once macroeconomic pressures ease and the market regains liquidity; Bitcoin price could gain strong momentum up to $126,000 thanks to strong institutional investments and stable demand for its exchange-traded funds (Bitcoin ETFs).
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