Bitcoin has surrendered all of its weekly gains over the past two days as widespread risk aversion swept across the cryptocurrency market.

The risk-off flows began late Wednesday following reports that the US military was reducing its troop presence at bases in the Middle East. At the same time, the State Department ordered staff cuts at diplomatic posts amid rising security risks and the possibility of renewed military action against Iran.

Selling pressure then intensified after The New York Times reported that the US and Israeli militaries had drawn up detailed plans for potential strikes on Iran following the US midterm elections. According to the report, the United States is also building up its military presence, with forces expected to be fully deployed by early November.

The prospect of another direct conflict between the US and Iran, layered on top of mounting growth concerns and a hawkish Federal Reserve — a policy stance that keeps borrowing costs elevated and weighs on appetite for risk assets — stands as a strong bearish driver for the crypto market.

Attention now turns to today's US Flash PMIs, preliminary readings of manufacturing and services activity released ahead of final estimates and among the timeliest gauges of economic momentum, which could serve as another major catalyst given the growth worries. Weaker-than-expected readings could deepen growth fears, further weigh on risk sentiment and set off another wave of selling in Bitcoin. Stronger data, by contrast, could ease concerns in the near term and pave the way for a relief rally, although it would leave the broader picture unchanged.

Bitcoin Technical Analysis – Daily Timeframe

On the daily chart, Bitcoin has pulled back to the key 80,000 support. Buyers are likely to continue stepping in around that level, with a defined risk set below it, to keep targeting a rally into the 98,000 level. Sellers, for their part, will want to see the price break lower to pile in for a drop into the 75,000 level next.

Bitcoin Technical Analysis – 4-Hour Timeframe

On the 4-hour chart, the price probed above the 84,000 resistance before erasing all of those gains. Should the price return to that zone, sellers are expected to step in around the resistance, with a defined risk above it, aiming for a break below the support. Buyers, on the other hand, will look for a break higher to extend bullish bets into the 87,400 level next.

Bitcoin Technical Analysis – 1-Hour Timeframe

On the 1-hour chart, buyers have the better risk-to-reward setup around the support, while sellers need a break lower to open the door to new lows. The red lines on the chart define the average daily range for today.

Upcoming Catalysts

The trading week concludes today with the release of the US Flash PMIs.

Source: Investinglive