Why is the price of bitcoin down today?

Bitcoin (BTC) prices fell today, with losses linked to the escalating geopolitical crisis in the Middle East and early gains from key economic data from the United States.

Bitcoin crashed when Israel bombed Beirut

On September 30, BTC fell 2.90%—the worst one-day decline in three weeks—to around $63,735. The drop coincided with Israel's bombing of central Beirut, the first airstrikes in nearly a year amid escalating hostilities with Lebanon's Hezbollah.

This is not the first time Bitcoin has reacted negatively to Middle East unrest this year. In the year In April 2024, BTC experienced a decline of more than 10% following Israel's attack on Iran, indicating that there is often an emotional sell-off during regional conflicts.

Bitcoin is often considered a hedge against economic volatility. But this year's geopolitical developments suggest that traders may want to move away from risky assets, including cryptocurrencies, in favor of safe alternatives during times of heightened uncertainty.

Avoid risk ahead of key US economic data

Today's fall in bitcoin is consistent with similar negative movements in US stock futures, indicating low appetite for riskier assets among traders and investors.

The cautious sentiment is mainly due to traders awaiting several key economic updates in the US this week, including jobs data and Federal Reserve Chairman Jerome Powell's guidance on interest rates.

According to Reuters data on Friday, non-farm payrolls for September showed an increase of 140,000 jobs.

The staff report could be crucial in shaping expectations for the Federal Reserve's next policy decision at its meeting on November 6-7. Traders are awaiting Powell's speech on September 30 for further clues.

As market participants anticipate possible shifts in monetary policy, particularly around interest rates, they are avoiding riskier assets like Bitcoin and equities and opting instead for safer investments.

However, futures tied to the federal funds rate indicate that market sentiment favors a 25-basis-point rate cut rather than a 50-basis-point cut. Low interest rates have historically been too much for Bitcoin.

Bitcoin's technical setup suggests a short-term correction

Today's decline in Bitcoin is part of a correction that began three days after the cryptocurrency reached a resistance trend in a descending channel pattern.

Related: US Election Results Won't Slow Bitcoin's Q4 Rally, Hedge Fund Says

Since September 30, BTC price has fallen more than 5% when measured against a resistance trend. It could decline to the next support targets near the 0.618 Fibonacci retracement level—around $65,565—and the 50-day exponential moving average (50-day EMA, red wave) near the $63,000 mark.

Further selling could move BTC price toward the channel's support trendline—below the 0.0 Fibonacci retracement level of $52,850—in October.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.