Bitcoin experienced a 4.5% drop in price on October 2, following a 6% gain the previous day. The failure to break the $28,500 resistance was attributed to the underperformance of Ether futures exchange-traded funds (ETFs) launched on October 2, as well as concerns about an impending economic downturn. This decline marked 47 days since Bitcoin last closed above $28,000 and resulted in $22 million worth of long leverage futures contracts being liquidated.
The Impact of the US Economy on Investor Expectations
Investors have become more cautious due to the overheated US economy, which could prompt further contractionary measures from the US Federal Reserve. The latest labor market data, released on October 3, revealed that there were 9.6 million job openings at the end of August, up from 8.9 million in July. This has caused market participants to speculate about the possibility of the Fed raising rates at their November meeting, with a 30% chance being priced in compared to 16% the previous week.
The Debut of Ether Futures ETFs Falls Short
On October 2, nine new ETF products were introduced to track the performance of futures contracts linked to Ether. However, these products saw disappointing trading volumes of under $2 million on their first day. The lackluster trading volume for Ether ETFs, in comparison to the successful launch of the ProShares Bitcoin Strategy ETF, may have dampened investors' optimism regarding a potential Bitcoin spot ETF, especially given the uncertainty surrounding regulatory approvals by the US Securities and Exchange Commission (SEC).
Regulatory Pressure Mounts as Binance Faces Lawsuit
Binance.US and its CEO Changpeng "CZ" Zhao are currently facing a class-action lawsuit in the District Court of Northern California. The lawsuit alleges unfair competition that aimed to monopolize the cryptocurrency market by harming competitor exchange FTX. The plaintiffs claim that CZ's statements on social media were false and misleading, particularly in relation to Binance's sale of FTT tokens before a November 6, 2022 announcement, which allegedly drove down the price of the token. The case against Sam Bankman-Fried, the founder of FTX, will soon begin in New York.
Bitcoin's Correlation to Traditional Markets and Regulatory Challenges
Bitcoin's price decline on October 3 highlighted its close ties to macroeconomic factors and concerns about the Federal Reserve's potential monetary policy response. The tempered expectations for cryptocurrency ETFs indicate that the $28,000 price level may not be the consensus among investors, given the ongoing regulatory pressures and legal challenges. The class-action lawsuit against Binance underscores the risks present in the crypto industry.
Disclaimer: This article is for general information purposes only and does not constitute legal or investment advice. The views expressed are the author's alone and do not necessarily reflect the views of Cointelegraph.
Did you miss our previous article...
https://trendinginthenews.com/crypto-currency/crypto-and-web3-projects-see-153-increase-in-attack-incidents-in-q3-2023
