Bitcoin Price Drops $4,000 Amid Geopolitical Tensions and ETF Outflows—Risk of Falling Below $54,000?

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October 3, 2024 02:47 EDT

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Arslan Butt

Crypto Writer

Arslan Butt

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Arslan Butt is an experienced webinar speaker, market analyst, and content writer specializing in crypto, forex, and commodities. He provides expert insights, trading strategies, and in-depth analysis…

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Last updated:

October 3, 2024 02:47 EDT

Why Trust Cryptonews With over a decade of crypto coverage, Cryptonews delivers authoritative insights you can rely on. Our veteran team of journalists and analysts combines in-depth market knowledge with hands-on testing of blockchain technologies. We maintain strict editorial standards, ensuring factual accuracy and impartial reporting on both established cryptocurrencies and emerging projects. Our longstanding presence in the industry and commitment to quality journalism make Cryptonews a trusted source in the dynamic world of digital assets. Read more about Cryptonews Bitcoin price has dropped $4,000, driven by escalating geopolitical tensions and significant ETF outflows. While large investors (whales) hold back due to low profits, the uncertainty could keep Bitcoin below key support levels in the near term.

Bitcoin Whales Hold Back: Low Profits and Geopolitical Risks Weigh on Price

Bitcoin prices dropped by $4,000 following heightened Middle East tensions on October 1. According to Ki Young Ju of CryptoQuant, large investors, or “whales,” are not yet making enough profits to sell their holdings.

BTC whales not in sufficient profit to dump on market — Ki Young Ju

👨‍💻An analysis by CryptoQuant founder Ki Young Ju indicates that large Bitcoin holders, or whales, aren’t likely to sell their holdings until retail investor liquidity drives prices higher. Newer whales (holding… pic.twitter.com/L3D6YJ0pnX

— NewInBlock (@NewInBlock) October 2, 2024

Currently, newer Bitcoin whales—those who have held the cryptocurrency for just over five months—would incur a 1% loss if they sold now. While older whales are slightly better off, they too are holding off on selling until prices improve.

The new whale wallets, primarily custodial wallets and ETFs, have not yet generated sufficient profit. pic.twitter.com/qDndpgmAnW

— Ki Young Ju (@ki_young_ju) October 2, 2024

Ju suggests that Bitcoin prices could face further pressure in the short term due to low whale profits and geopolitical uncertainty. Without increased buying activity from regular investors, Bitcoin could potentially drop below $54,000.

Key Points:

• Whale Profits Low: Newer whales face a 1% loss if they sell now.
• Price Pressure Ahead: Bitcoin may fall below $54,000 without market support.

How Kamala Harris’s Proposed Tax on Unrealized Gains Could Impact Bitcoin Investors

Kamala Harris’s proposal to tax unrealized capital gains at 25% could heavily impact Bitcoin investors. Unlike the usual practice of taxing assets only when sold for a profit, this tax would apply even if Bitcoin holdings haven’t been sold.

Wealthy investors like Michael Saylor and the Winklevoss twins could face tax bills up to $1 billion just for holding onto their Bitcoin.

Kamala Harris’s Unrealized Capital Gains Tax Would Hurt All Crypto Investors

— newETFs.io (@newetfs) October 2, 2024

If passed, this tax could force large investors to sell off assets to cover their tax liabilities, causing a significant drop in cryptocurrency prices. This sell-off would not only harm big players but also smaller investors, as market values could decline sharply.

Key Impact:

• Tax bills could reach billions for major Bitcoin holders.
• Forced sell-offs could drive down overall market prices.

Iran-Israel Conflict Sends Gold Soaring as Bitcoin Drops—Safe Haven Debate Rises

After Iran launched 180 missiles at Israel, tensions in the Middle East spiked, causing Bitcoin to drop by $4,000—over 3% in a single day.

In contrast, gold prices surged to a record $2,665 per ounce, and oil jumped to $72 a barrel as investors shifted towards traditional safe-haven assets.

IRAN ATTACKED ISRAEL

400+ missiles have been launched and many of them hit their targets

Bitcoin price instantly dropped to $60,000 pic.twitter.com/299MMIuD0M

— Cryptopolitan (@CPOfficialtx) October 1, 2024

The sudden drop in Bitcoin has reignited debate over its status as a reliable hedge during geopolitical crises.

While Bitcoin is often seen as a “safe-haven” asset, this downturn suggests that many investors still turn to conventional assets like gold during periods of uncertainty.

Analysts suggest that Bitcoin’s recent performance indicates it has yet to fully replace gold’s role as a stable store of value during global unrest.

SEC Appeals Court Ruling on Crypto Oversight—Impact on Bitcoin and Ripple

The U.S. Securities and Exchange Commission (SEC) is appealing a court decision that limited its authority over cryptocurrency regulation.

The appeal challenges Judge Analisa Torres’ July 2023 ruling, which stated that Ripple’s XRP sold on public exchanges is not a security, removing SEC oversight of $757 million in XRP sales.

However, Torres also ruled that Ripple violated securities laws when selling $728 million worth of XRP to institutional investors, resulting in a $125 million fine.

SEC appeals decision that restricted its crypto oversight pic.twitter.com/gEgt8rDAjk

— Reuters (@Reuters) October 3, 2024

Ripple CEO Brad Garlinghouse called the SEC’s appeal “misguided.” If the SEC succeeds, stricter regulations could hit the crypto market, potentially hurting Bitcoin prices.

Conversely, if the ruling is upheld, Bitcoin could see positive momentum as confidence in the crypto industry strengthens.

Bitcoin Technical Outlook: Key Resistance at $62,250 as Bulls Eye $63,400 Target

Bitcoin (BTC/USD) is trading at $61,400, up 1.27% for the day, following a mild rebound from its recent lows.

The 4-hour chart shows Bitcoin fluctuating near its pivot point of $61,630, with immediate resistance at $62,250 and further resistance at $62,860 and $63,400.

On the downside, immediate support lies at $60,640, with additional levels at $60,000 and $59,430.

The Relative Strength Index (RSI) is neutral at 51, indicating no strong buying or selling momentum at the moment.

The 50-day Exponential Moving Average (EMA) is positioned at $61,860, serving as a key indicator for trend direction.

Bitcoin Price Chart: Source: Tradingview A sustained move above $62,000 could boost bullish sentiment, while a drop below this level might reinforce bearish pressure.

The Relative Strength Index (RSI) is neutral at 51, indicating no strong buying or selling momentum at the moment. The 50-day Exponential Moving Average (EMA) is positioned at $61,860, serving as a key indicator for trend direction.

A sustained move above $62,000 could boost bullish sentiment, while a drop below this level might reinforce bearish pressure.

Key Insights:

• Resistance at $62,250: A break above could signal further gains toward $63,400.
• Support at $60,640: A dip below may trigger a downside toward $59,430.
• 50 EMA at $61,860: Crucial for defining short-term momentum.

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