The price of Bitcoin experienced a temporary drop below $67,000 on October 21, which is attributed to its correlation with the US stock market, particularly the S&P 500, with a positive correlation of 0.63. Both markets experienced declines due to macroeconomic uncertainties.
Contributing factors to this uncertainty include rising inflation expectations and concerns over government spending. Market participants remain cautious, watching for US Federal Reserve actions to control inflation and the outcome of the upcoming US elections, which heightens market uncertainty.
Analyst Justin Bennett identified other factors such as high open interest levels, whale traders trimming long positions, and recent perp-driven rallies contributing to the Bitcoin price crash. He anticipated a price correction, which aligns with market behaviors preceding US elections.
Bennett sees the $65,800 range as a critical level for Bitcoin. At present, Bitcoin trades around $67,700, down nearly 2% in the past 24 hours, according to CoinMarketCap data.
