First Mover: Bitcoin Retreats Before US Election After Dominating Crypto in October

Published on by Coindesk | Published on

Litecoin was the second-best performer in the group, with a 22% return, followed by bitcoin cash at 16%.CoinDesk reported around the start of the month that digital-asset analysts were turning more bullish on bitcoin.

Finance's YFI that surged in price earlier this year amid an explosion in popularity of "Decentralized finance," or DeFi."We are seeing a return to bitcoin dominance," said Andrew Ballinger, an analyst at Wave Financial, a digital-asset-focused investment manager based in Los Angeles and London.

The renewed interest in bitcoin, now with a market capitalization of about $250 billion, coincided with new signs of growing interest in the cryptocurrency from institutional investors as well as big companies like PayPal and Square.

A resurgence of the coronavirus along with a deteriorating U.S. economic outlook kindled speculation that authorities would push to provide more fiscal and monetary stimulus; that might push up bitcoin's price, seen by many investors as a hedge against inflation.

The Standard & Poor's 500 Index of large U.S. stocks slid 2.8% in October, and gold slipped 0.1%.The question going forward is whether bitcoin reverts to the mean or if it gets carried up on a groundswell of investors piling into the only big trade that really seems to be working in 2020.

Bitcoin is up 92% year to date, versus a 1.2% gain for the S&P 500.The biggest losers in the CoinDesk 20 in October were Orchid, with a price decline of 25%, and 0x, down 21%. Bitcoin watch.

Bitcoin is feeling the pull of gravity at press time, having failed to keep gains above a key hurdle over the weekend.

According to some analysts, the failed breakout, coupled with continued instability in traditional markets, could lead to a bigger bitcoin price drop in the short-term.

All these factors considered, the possibility of bitcoin revisiting the former hurdle-turned-support of $12,500 cannot be ruled out.

Bitcoin mining difficulty set to drop by an estimated 15%, as blockchain network automatically rebalances from decrease in hashpower due to end of China's rainy season.