November 21, 2024
BTC price hits ‘Uptober’ up 5% — 5 things to know in Bitcoin this week

Bitcoin (BTC) kicks off a new week, a new month, and a new quarter with a solid bullish push above $28,000.

The largest cryptocurrency faces ‘Uptober’ with its best weekly close since mid-August – what happens next?

After mixed BTC price action in September, market participants have braced themselves for a potentially volatile monthly close, but ultimately, this will work in the favor of the bulls.

With Bitcoin prices regularly seeing significant gains in October, there is excitement about what might happen in the coming weeks.

Macro triggers may not provide an immediate answer as October begins with a quiet phase in U.S. macro data and a government shutdown was averted at the last minute.

Bitcoin fundamentals have yet to respond to the surge in spot prices, with mining difficulty dropping due to the next automatic adjustment on October 2.

Cointelegraph explores these topics and more in its weekly BTC price catalysts digest.

Bitcoin Bulls Acknowledge Bitcoin Price Reversal Risk

Bitcoin has cleared the tail of the September monthly candle ahead of the October 1st weekly close, with little overall movement.

Everything changed as the week came to an end, with a sudden surge in Bitcoin prices that took the price below $28,000. In the following hours, Bitstamp made a new local high of $28,451.

The largest cryptocurrency is up more than 5% since October 1, according to data from Cointelegraph Markets Pro and Cointelegraph Markets Pro. trading view confirm.

BTC/USD 1 hour chart. Source: TradingView

The move produced Bitcoin’s highest weekly close since mid-August, offsetting weakness since then.

Michaël van de Poppe, CEO and founder of MNTrading “Bitcoin back to $28,000” Tell X (formerly Twitter) subscribers of the day.

“There could be a complete pullback, but the trend is clearly upward. Every consolidation in Bitcoin will be a period when altcoins start to follow Bitcoin’s path. This quarter is going to be interesting!”

Popular trader Skew also pointed to the possibility of a decline, citing exchange order book trends as evidence.

“The order book here is quite broad in terms of available/static liquidity,” he said explained same day.

“In my opinion, the larger price response comes from increased liquidity in the spot order book; meaning spot buyers require greater volume to liquidate $28,000-$29,000 (market structure shift).”

BTC/USD 1-day chart with 200-week simple moving average (SMA). Source: TradingView

He added that the driving force in determining the direction of the market now lies with spot traders.

Keith Alan, co-founder of Material Indicators, release A snapshot of Binance’s order book, showing $28,000 is the main hurdle to overcome following this move.

Bitcoin him Add toIt is currently battling resistance at the 200-week moving average at $27,970.

“Resistance is expected to hit again this month, but since I’m still in ‘buy the dips, sell the dips mode,’ I’m going to stick to the rules, take the quick money and look for the next setup,” came the comment.

“Volatility is expected to continue over the next 24 hours.”

Binance’s BTC/USD order book information. Source: Keith Alan/X

The classic “Uptober?”

Bitcoin has started October with a strong performance that is a departure from last year.

As Cointelegraph reported, the 0.7% drop in Bitcoin prices heralded the start of statistically the strongest month for Bitcoin price gains.

The following month was surprisingly sideways, culminating in FTX’s collapse, sending the cryptocurrency market to two-year lows later in Q4.

So far, this year feels different, more like the classic “Uptober” of years past. according to According to data from monitoring resource CoinGlass, BTC/USD has not ended October lower than where it started since 2018.

BTC/USD monthly returns (screenshot). Source: CoinGlass

While discussing this topic, popular market commentators happily conveyed the spirit of 2021 – instead of hitting multi-year lows, Bitcoin prices hit all-time highs in the fourth quarter of the year.

Popular trader Jeller went a step further, showing that Bitcoin is in the midst of a more significant trend change.

“Bitcoin broke the mid-term downtrend, retested it, and is now embarking on its next leg up,” he said declare There is an explanatory diagram next to it.

“A strong finish to the week and most charts look like we will move higher this week. Welcome to Uptober.”

BTC/USD annotated chart. Source: Jelle/X

Until then, like Van de Poppe, Jelle also thinks BTC/USD could be on the rise this month Over $30,000 for the first time since June.

Popular analysis account Stack Hodler says: “8 of the past 10 months have been positive for Bitcoin” wrote He noted in his analysis on Oct. 1 that, on average, returns during that time were 22%.

Difficulty drops as it hits all-time high

In contrast to the norm in recent months, Bitcoin network fundamentals are not mimicking bullish sentiment in the spot market.

Latest estimates from data resource BTC.com exhibit Instead, when the next automatic adjustment occurs on October 2, the difficulty will drop by 0.7%.

Overview of Bitcoin network basics (screenshot). Source: BTC.com

Currently at all-time highs, the last time difficulty rose by nearly 6%, BTC’s price performance was markedly uncertain.

As Cointelegraph reported in September, miner competition remains fierce, and the surge in hash rates highlights the changing environment as miners make long-term commitments to the network in the name of profitability.

With hashrate (the estimated processing power deployed to the network) also higher than ever before, the classic mantra “price follows hashrate” is back in the spotlight.

Not everyone adheres to this statement, and some of Bitcoin’s most respected names believe the opposite is true: hash rate follows price.

Among them is Jameson Lopp, co-founder and chief technology officer of Bitcoin storage company Casa.

In a blog post posted over the weekend, Lopp unveiling He strives to more accurately predict hash rate outcomes.

“By blending many hashrate estimates together and weighting them based on the most recent estimate and various tracking data timeframes, we fairly easily improved the 1,100-block estimate to an average error rate of 13% lower, lowering the standard deviation by 14%.%,” he concluded.

Depending on the resources used, the hash rate value can be different Only the overall trend is clearly visible to the observer.

Bitcoin raw hash rate data (screenshot). Source: MiningPoolStats

Macro diary headlines from Fed spokesperson

While Bitcoin got excited during the first week of October, the same could not be said for U.S. macro data, as the month started on a quieter note.

The main events that could happen this week have arguably already happened as lawmakers avert a government shutdown At the last minute.

Aid to Ukraine became a sticking point, but the issue was dropped after a deal in Congress.

When it comes to this month’s outlook, financial commentary resource Corbett will focus on upcoming comments from Federal Reserve officials.

Markets will continue to focus on official language for clues before the next Federal Open Market Committee (FOMC) meeting on November 1 to decide on interest rate policy.

“The next Fed meeting is just a month away. With 13 Fed speakers this week, we expect more volatility,” Kobeissi concluded on X.

Latest data from CME Group Fed Watch Tool There were mixed emotions about the decision the FOMC will make. The market currently believes that there is a 62% chance that interest rates will remain at current levels.

Probability chart of the Fed’s target interest rate.Source: CME Group

Analysts positive on USD liquidity

At the same time, financial commentator Tedtalksmacro focused on related macro phenomena and pointed out the liquidity trend in the United States and its impact on future Bitcoin price trends.

Related: Will Bitcoin ‘Uptober’ Bring Gains to MKR, AAVE, RUNE, and INJ?

The relationship between global liquidity and risk asset performance is well documented – especially given the volatility that has occurred since the onset of the COVID-19 pandemic.

Late last week, the Tedtalks macro showed a divergence between USD net liquidity and BTC/USD.

In the accompanying analysis, he argued that measuring the delta in “direct liquidity” could provide better insight. He expressed his appreciation for Bitcoin’s prospects.

“The bottom line is that the path of least resistance now is sideways/higher from here over the next few years…but the huge risk remains (at least for a few quarters) that you’ll get chopped off before prices move up quickly.” ,” he wrote.

This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.