Bitcoin experienced a sharp drop to $67,000 during Asian trading hours on Friday, tracking losses in gold and the Nasdaq. The cryptocurrency’s price eventually recovered to around $68,500, but the overall market sentiment remained cautious.
Analysts pointed to fading expectations of a Federal Reserve rate cut as a possible catalyst for the drop. Greta Yuan, Head of Research at VDX, noted that the recent surge in bitcoin prices may have been too rapid for the market to accurately price, leading to a necessary correction.
Adrian Wang, Founder and CEO of Metalpha, suggested that uncertainties surrounding the upcoming mining reward halving event could also be contributing to the market adjustment. Wang highlighted concerns about the potential impact of Blackrock’s Bitcoin ETF on market volatility.
Despite the recent pullback, Singapore-based QCP Capital remains optimistic about the broader uptrend of bitcoin. The firm emphasized that as long as demand for spot BTC ETFs remains strong, any dips in price are likely to be short-lived.
Looking ahead, the market is preparing for the release of Federal Open Market Committee minutes next week, which could introduce additional volatility. However, QCP Capital noted strong demand for year-end BTC calls in the range of $100,000 to $150,000.
As the market continues to navigate these uncertainties, a prediction market contract on Polymarket gives a 38% chance that bitcoin will close above $70,000 by noon Friday in the U.S. Eastern Time. This figure is down from a high of 90% earlier in the week, reflecting the current cautious sentiment among investors.