The Beginning of the Next Leg Lower

Yesterday we questioned whether Bitcoin’s Wednesday night rally was a genuine reversal or just a relief bounce before the next leg lower. Unfortunately, it seems to have been the latter. Bitcoin is now back below $101K and altcoins have surrendered much of the ground they gained during that move, now poised to head even lower.

Broader macro concerns continue to weigh on risk-on assets. Overvaluations in both equities and gold are becoming more evident. The S&P 500 dropped over 1% and the Nasdaq fell nearly 2%, with both indices on track to close their first red week since early October. Meanwhile, gold remains in its post-correction consolidation phase, trading below $4,000 for the seventh consecutive day.

Flows are rotating back into US bonds, with yields falling amid signs of a cooling labour market. However, with the US government shut down, investors have been forced to rely on private data rather than reports from the Bureau of Labor Statistics. It is a textbook risk-off environment.

As for Bitcoin, the near 3% loss has put pressure back on the bulls, who are once again being forced to defend the must-hold $100K level. A decisive break below could trigger panic selling and drive the price even lower. While this would present a solid opportunity for those looking to accumulate cheaper Bitcoin, it is a far less attractive scenario for altcoins, which remain under pressure and are underperforming. A deeper correction would hit them harder in what is already an unfavourable environment. Focus here should be on accumulating spot Bitcoin.

Stormrake Spotlight: Hyperliquid (HYPE) ($38.68)

HYPE lost over 6% yesterday, giving back all of its gains from Wednesday night. This mirrors the action across most altcoins. While it generally tracks Bitcoin’s moves, HYPE tends to outperform to the upside and often lags during downtrends, although it has still managed to outperform BTC on red days, which is a positive sign.

BTC/USD Key Levels and Price Action:

The range remains clearly defined: $100K support and $104K resistance. Yesterday, Bitcoin failed to breach $104K, which we flagged as a tough level due to confluence with the 55EMA. Price is now heading back toward $100K, which should pose a significant challenge for the bears to break through with conviction.

BTC Total ETF Flows for 6 Oct: (data not available at the time of writing)

*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

Create a brokerage account today

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

Disclaimer

All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.