“This time, Bitcoin is not to blame,” as the downturn resulted from recession fears in the US and market instability. This was stated by Bernstein analysts, according to The Block.
The price of the leading cryptocurrency briefly fell below $50,000, while Ethereum dropped below $2,200.
“The initial reaction of Bitcoin as a risk asset is unsurprising. This is a common pattern for the markets of the leading cryptocurrency (as was also observed during the sudden crash in March 2020), especially since it is the only asset traded over the weekend. We remain calm,” wrote Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia in a note to clients.
According to the experts, the launch of Bitcoin exchange-traded funds has simplified investing in digital gold, leading to a difference in the cycle of the leading cryptocurrency.
The analysts noted the “decent start” of spot Ethereum ETFs against the backdrop of the success of Bitcoin-based products.
Meanwhile, the leading cryptocurrency remains under the influence of the “Trump factor” in light of the upcoming US presidential elections and the stated position of the Republican candidate.
“It is not surprising that as the odds of Trump and Harris on Polymarket narrowed, Bitcoin and altcoins traded weakly. We expect markets to remain in a limited range until the US elections, trading with catalysts such as candidate debates and the final voting outcome,” the analysts noted.
Overall, they are more likely to expect the crypto market to react to general macroeconomic signals. A recovery in broader indicators will set an example for digital assets, Bernstein experts believe.
Earlier, 10x Research also identified US economic indicators as the main factor in Bitcoin’s decline.