PrimeXBT: Was Bitcoin’s rejection of $70,000 and Black Monday’s market shake out a coincidence?

cryptonews.com:

By Matthew Hayward, Senior Market Analyst at PrimeXBT

The liquidity shakeout on Black Monday may seem like a distant memory, but its impact remains relevant as market participants eagerly anticipate upcoming data releases to gauge the Federal Reserve’s (FED) next move. Early Black Monday morning a few weeks back, during the Asia trading session, we saw the Volatility Index (VIX) spike to levels of around 65%. The last time we had visited such areas was during the COVID-19 pandemic back in 2020.

THE VOLATILITY INDEX (VIX):

The spike in the VIX was quickly followed by a surge in Bitcoin’s (BTC) volatility. Early that week, BTC briefly surged to $70,000.00, marking the first time it had reached this level since earlier in the year. However, this rally was short-lived as the price rejected this key psychological level, and subsequently fell to around $65,500.00, a decline of nearly 6.5% from the $70,000.00 high.

Later in the week, decisions on interest rates from the Federal Reserve (FED), the Bank of England (BoE), and the Bank of Japan (BoJ), combined with a disappointing Non-Farm Payroll (NFP) report, accelerated the situation. Traders looked to offload their Carry Trade positions, and recession speculation saw a combined global market sell off, resulting in Black Monday. This combination of factors drove BTC’s price down further to as low as $49,500.00 before it finally found support.

Black Monday, a dramatic market sell-off, indeed left a lasting impression on investors and policymakers. However, the Federal Reserve (FED) chose not to intervene directly during the sell-off, sparking debates about its role in stabilising the economy and financial markets. So the question is, is the FED going to cut interest rates, and