Bitcoin Falls for Fourth Day Amid Geopolitical Risks and Rising Fear Index

• Bitcoin has fallen 8% from its recent highs, marking four consecutive days of declines amid rising geopolitical tensions.
• Large Bitcoin holders, or whales, have intensified the sell-off, contributing to Bitcoin’s price drop as investor sentiment weakens.
• Historically, October is a strong month for Bitcoin, with an average return of 20.6%, offering potential optimism for a market recovery.

Bitcoin’s price experienced a notable four-day decline, dropping to $61,634. This marks its lowest level since September 18 and an 8% drop from last week’s high. The current sell-off comes amid rising geopolitical tensions, with investors turning risk-averse after Israel pledged retaliation following recent attacks. 

Rising Fear Index and Investor Sentiment Shift

Amid these market conditions, the crypto fear and greed index fell to 39, moving into the fear zone from last week’s high of 60. This decline in sentiment has significantly impacted Bitcoin’s price as investors adopt a cautious approach. Historically, Bitcoin tends to drop when enthusiasm among social media users peaks. 

Additionally, large Bitcoin holders, commonly known as whales, have contributed to the downward pressure. One prominent seller, identified as Ceffu, withdrew 3,372 Bitcoins worth $211.3 million. This entity has been consistently selling major cryptocurrencies, including Ethereum, Solana, and Avalanche, adding to market uncertainty. Another investor sold 265 Bitcoins last week, profiting $11.5 million from the sale, further increasing selling pressure on the market.

Geopolitical Tensions and Broader Market Impact

Besides the crypto market, other risky assets, including the Dow Jones, S&P 500, and Nasdaq 100, have also been in decline. Rising bond yields and a stronger US dollar, which reached $101.50, its highest level since September 13, have added to the risk-off sentiment. Investors are reacting to geopolitical developments and concerns about the broader market outlook.

Technical Analysis and Potential for Rebound

Technically, Bitcoin’s price retreated after hitting key resistance at $66,000, a critical level that has defined the highest price swings since March. According to trader Peter Brandt, Bitcoin needs to break through this resistance to initiate a broader upward move toward its all-time highs. However, despite the recent decline, Bitcoin remains above both the 50-day and 200-day moving averages, indicating that a bounce back may still be possible.

Looking ahead, there is hope that Bitcoin could recover in the coming weeks. Historically, October is a strong month for Bitcoin, with an average return of 20.6%. Moreover, November often performs even better, averaging 46% returns. Potential catalysts for a rebound include more Federal Reserve rate cuts and the conclusion of the American election period, which could spur investor confidence in the market.