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Key Takeaways
- Bitcoin is falling toward the $100,000 level following last weekend’s rout in the digital assets market.
- Without the support of the safe-haven narrative, crypto market experts are looking for other reasons to stay optimistic about the near term for bitcoin.
So much for “Uptober.”
Bitcoin is close to giving up all of this year’s gains, dragged lower since renewed trade tensions between the U.S. and China sparked a reversal in the digital assets market. The world’s largest cryptocurrency (BTCUSD) has declined about 7% since Monday, according to research platform Messari.
The drag in bitcoin prices is reflected in the shares of stocks linked to it. Bitcoin treasury Strategy (MSTR), crypto exchange Coinbase (COIN) and stablecoin issuer Circle (CRCL) are all down at least 5% in the past five days. At around $107,000, bitcoin’s 14% year-to-date return is now roughly in line with the S&P 500’s.
Trade worries last week sparked a historic purge in the crypto market, upending the bitcoin-as-safe-haven narrative and severing the link between it and gold, whose recent climb to record highs is driving American consumers to cash in. Gold, Yardeni Research President Ed Yardeni wrote earlier this week, “is the new bitcoin.”
Why This Matters to Investors
Trade tensions have taken some of the air out of bitcoin’s sales, pulling the price of the cryptocurrency back from recent record highs. That, and a continued move higher in gold, could be interpreted as a sign that investors once again see it more as a risk asset than a hedge. Still, some crypto experts see reasons why the climb could start again.
Bitcoin has pulled back from recent record highs, which some observers note is not uncommon: Some past highs have also been followed by substantial pullbacks.
Still, with bitcoin seemingly once again viewed more like a risk asset than a safe haven, experts are considering crypto-specific factors to project the next move for prices. Several remain upbeat.
Ben Cowen, founder and chief of quantitative market analysis provider Into the Cryptoverse, is eyeing technical indicators such as bitcoin’s 50-week moving average, which is currently around $100,000. He expects another top in bitcoin in the last few months of the year before a bear market in 2026.
“There’s still a reason to be optimistic as long as bitcoin is holding above the 50-week moving average,” said Cowen in a recent episode of the Milk Road podcast.
Cathie Wood’s Ark Invest and Fidelity—which are behind the Ark 21Shares Bitcoin ETF (ARKB) and the Fidelity Bitcoin Fund (FBTC), respectively—recently published quarterly reports for the digital asset, highlighting possible near-term positives.
Ark’s report pointed toward indicators—public companies boosted their holdings by 40% this year, and crypto derivatives markets are healthy—it sees as bullish for bitcoin. “Although short-term volatility is always possible, the confluence of strong on-chain metrics, institutional demand, and macroeconomic support suggests continued upside potential,” Fidelity wrote.”
Matt Hougan, chief investment officer of Bitwise Asset Management, issuer of the Bitwise Bitcoin ETF (BITB), expects the crypto market to shrug off the latest rout because no major crypto player keeled over, blockchains handled the stress test with no issues, and professional investors have “largely ignored” it.
“Crypto may be a little jittery in the near term,” Hougan wrote.
