Bitcoin, Ethereum, Dogecoin Tumble Amid Recession Worries: Analyst Says ‘Uptober

Major cryptocurrencies experienced a significant decline as concerns rose over the possibility of higher interest rates stalling the housing market and potentially pushing the economy into a recession.

What Happened: Job openings in August exceeded expectations, with the addition of 690,000 positions, raising the total number to 9.6 million. This data highlights the remarkable resilience of the American labor market.

The U.S. dollar maintains its relentless strengthening, intensifying risk aversion sentiments. Surpassing the 107 level, the U.S. Dollar Index (DXY) reached its highest point in the past 10 months.

Tuesday marks the commencement of the initial trial in a series of two distinct criminal proceedings against former FTX CEO Sam Bankman-Fried.

The media has extensively covered the story of Bankman-Fried since the collapse of the company 11 months ago. Books, podcasts, and numerous articles have been dedicated to this topic. 

The controversial collapse of FTX, led by Bankman-Fried, in November last year resulted in a staggering wave of withdrawals and a subsequent failure to justify the disappearance of billions of dollars from customer accounts. In a significant development, federal prosecutors have leveled various charges against Bankman-Fried, including fraud, conspiracy to commit money laundering, and several other counts.

In other news, the U.S. regulators asserted on Tuesday their opposition to Coinbase Inc.’s plea to dismiss the securities law violation it is accused of. They claimed that the crypto exchange’s justification is riddled with “fatal flaws.” In June, the Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase (NASDAQ:COIN), alleging that the U.S.-based company had not registered as a securities exchange with the regulatory authority. Coinbase has sought to have the case thrown out, requesting the judge to rule before the trial that cryptocurrency transactions are not the same as investment contracts.

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Currently, the global crypto market capitalization stands at $1.09 trillion, a 2.55% decrease in the last day.

Stocks experienced a significant decline on Tuesday, triggered by a surge in Treasury yields to their highest level since 2007. This development has raised concerns about the possibility of higher interest rates adversely impacting the housing market and potentially pushing the economy into a recession.

During the session, the S&P 500 dropped 1.37%, reaching its lowest level since June, before closing at 4,229.45. The Nasdaq Composite, which is heavily focused on technology stocks, also experienced a decline of 1.87%, ending the day at 13,059.47. Growth stocks were particularly affected by the increase in rates, resulting in some of the biggest losses in the market.

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Analyst Notes

Crypto analyst Michael Van de Poppe predicts that the higher timeframe chart for Bitcoin is presenting strong potential. “Holding above the 200-Week EMA is a must-hold. Currently, we’re doing that. If the lower time frames keep on pushing higher lows, we’ll most likely run towards $30-35K in the coming 4-8 weeks.”