Bitcoin (BTC) started the new week in the spirit of “Uptober,” with the weekly close giving way to a classic short squeeze.
Bitcoin prices were once again experiencing the same classic swings seen earlier this month, with the largest cryptocurrency topping $28,000 before Wall Street opened for the first time.
Although still within an established trading range, Bitcoin is keeping traders on their toes, with both bulls and bears exposed to short-term spot price swings and liquidations increasing.
Sentiments fluctuate with the moves. Nearing the top of the range, Bitcoin saw a flurry of bullish predictions, but when the downward trend resumed, these predictions were replaced by fear and foreboding.
As a result, prominent market commentators remain cautious even as October, traditionally Bitcoin’s best month, comes to an end.
Behind the scenes, the signs are clear – Internet fundamentals are heading toward new all-time highs, and the difficulty lies in what could be a third major rally in 2023.
This week, as macroeconomic data gives way to geopolitical tensions in the Middle East, Bitcoin investors will need to pay close attention when it comes to external sources of Bitcoin price volatility.
Cointelegraph takes a closer look at these market phenomena in Cointelegraph Markets’ weekly BTC price trigger event digest.
BTC Price: Short Squeeze and “Old” Coins
Bitcoin’s weekly closing moves this week did not disappoint, with one short squeeze after another and BTC/USD gaining $1,000, according to data from Cointelegraph Markets Pro and Cointelegraph Markets Pro. trading view comfirmed.
The mood at the first opening on Wall Street was markedly different from that over the weekend and before, with downside the dominant feature of the market amid questionable U.S. macroeconomic reports.
Now, optimism is returning, with MN Trading founder and CEO Michaël van de Poppe calling the multi-day high of $27,975 a “great step.”
“Buy the dip, with the best entry price being $27,300,” he said Tell Some of the comments of the day from X subscribers.
from Depop further predictions Continuation of the uptrend.
Monitoring resource CoinGlass reported the impetus behind the latest action, pointing to the liquidation of BTC short positions.
“27450 points, a large number of short positions have been closed” Summarize And the BTC/USDT perpetual swap liquidation heat map of Binance, the world’s largest exchange.
“Next, focus on the liquidation levels of 26500 and 27660.”
Popular trader Crypto Tony is more cautious, having previously warned that Bitcoin could face significant downward pressure in the coming months, taking it all the way back to $20,000.
Bitcoin USD / Dollar – renew
Stopped as we regained the $27,300 resistance zone, now just waiting for my next trigger.The bulls are likely to take us to the $29,000 resistance zone, but remember this is a heavy area
If you’re craving it now, be careful pic.twitter.com/aQGF1ZVJuL
— CryptoTony (@CryptoTony__) October 16, 2023
Meanwhile, for research firm Santiment, the change in tone is about more than just a short squeeze.
Reports suggest that “older” BTC is rising, with Bitcoin leaving their wallets before returning to $27,000 after a long period of dormancy.
“With the number of dormant BTC wallets at their highest level since July, these spikes in our spending age indicator indicate a reversal in price direction,” part of the note on the illustrative chart point out.
Dalio warns ‘World War III’ will be more than 50/50
The macro picture for the coming days includes less important U.S. data than last week
Instead, jitters over the potential impact on markets of the ongoing conflict between Israel and Hamas are taking center stage, while the specter of inflation lingers in the background.
The latter has been made abundantly clear before, as data released last week and previously showed that U.S. inflation continues to exceed market expectations.
With two weeks remaining before the Fed’s next interest rate meeting on November 1, inflation cues will become very important for risk asset sentiment.
The financial commentary resource “Kobeissi Letter” summarized X and listed the major financial events in the United States this week. “There are still two weeks until the November Federal Reserve meeting.”
These include speeches from Federal Reserve Chairman Jerome Powell, one of 17 Fed speakers who will take the stage this week.
Main events this week:
1. Retail sales data – Tuesday
2. Housing starts data – Wednesday
3. Existing home sales data – Thursday
4. Speech by Fed Chairman Powell – Thursday
5. The third quarter 2023 earnings season begins
6. A total of 17 Fed speeches
There are still 2 weeks until the November Fed meeting.
— KobeissiLetter (@KobeissiLetter) October 15, 2023
Corbisi was one of many to point to the pessimistic forecasts of billionaire investor Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, as a sign of how much politics may ultimately influence sentiment.
in a LinkedIn Post On October 12, Dalio warned that the risk of “World War III” has increased to 50% in the past two years.
“Fortunately, the world war between the largest powers (the United States and China) has not yet crossed the line of irreversibility, from being containable (and it is) to becoming a brutal war between the largest powers and their allies,” he wrote.
“If direct combat did occur between these great powers, with one side killing large numbers of people on the other side, we would see a transition from a limited pre-hot war conflict to a brutal World War III.”
GBTC ‘discount’ near two-year low
In addition to Bitcoin price action, the largest institutional Bitcoin investment vehicles are also experiencing a strong recovery.
Grayscale Bitcoin Trust (GBTC) is currently trading at the smallest discount to net asset value (NAV) (the spot price of Bitcoin) since December 2021.
As Cointelegraph reported, this discount was once a premium, reaching almost 50% earlier this year, with GBTC’s turnaround coinciding with operator Grayscale’s victory in a legal battle with U.S. regulators.
Now, the market seems more confident than ever that the spot-price exchange-traded fund (ETF) Grayscale plans to create and launch on top of GBTC will be approved, triggering a flood of institutional interest in Bitcoin. the process of.
“One of the distinguishing features of GBTC is that it does not provide a direct mechanism to redeem shares for actual Bitcoin, and it is traded over-the-counter (OTC),” said popular trader and podcast host Scott May Scott Melker is known as the “Wolf of Bitcoin.”All Streets,” wrote in part of a recent article X-Analysis.
“Such structural factors may cause its market price to deviate from Bitcoin’s underlying value. Factors such as market speculation, investor sentiment, liquidity constraints, and even regulatory news can all affect this price difference.”
Melker went on to say that the door for GBTC to become an ETF is “far from certain.”
“Meanwhile, the U.S. Securities and Exchange Commission (SEC) is also reviewing several other spot Bitcoin ETF proposals, including from financial giants such as Fidelity, BlackRock, and Franklin Templeton, adding another layer to the market landscape. A layer of complexity and uncertainty,” he famously said.
Mining difficulty is about to hit a new record
The latest Bitcoin price rally has helped improve predictions for the Bitcoin network’s fundamentals.
According to data from monitoring resources, Bitcoin difficulty is currently expected to expand to a new all-time high before the next automatic adjustment on October 16 Bitcoin Network.
This is nothing new in 2023. This year, difficulty and computing power have repeatedly set new records. However, the upcoming difficulty increase could push it into the top three so far this year at nearly 7%.
If locked, the difficulty would breach the 60 trillion mark for the first time, reflecting increasing competition among miners and the unparalleled security of the Bitcoin network.
At the same time, hashrate estimates vary depending on the resource.Raw hash rate data comes from Mining pool statistics Showing the latest all-time high of 497.66 exahashes per second (EH/s) on October 9th.
The combination of high difficulty and relatively tame Bitcoin price levels inevitably raises questions about miners’ profitability. As fees per Bitcoin get higher and higher, concerns arise regularly about how miners continue to be incentivized.
Just like hashrate, estimates of the actual cost of total production per Bitcoin vary, with multiple factors including physical location playing a role in the statistics.
According to Cointelegraph, next year’s block subsidy halving will further reduce the number of BTC received per mined block by 50%.
“I think the price is OK for miner ATMs, but the difficulty needs to increase quickly after the halving,” said James Straten, a research and data analyst at cryptocurrency insights firm CryptoSlate. wrote Part of last week’s X review.
Unstable “Uptober”
Is the fate of Uptober up in the air in 2023?
Related: Bitcoin heralds potential scope expansion – will SOL, LDO, ICP and VET follow?
Due to the strength of the current trading range since March, even small changes in the spot price of BTC can affect the gains so far in October.
#bitcoin Instead of Uptober or Rektober, we got Choptober.
This will be the first time in four years that October beer finally turns red.
Last month was the first green September in six years.
Even though we’re only halfway through the month, a lot can change. pic.twitter.com/NsoVvH5O7D
— Daan Crypto Trades (@DaanCrypto) October 14, 2023
While it remained negative last week, the rise to $28,000 now means BTC/USD has gained 3.5% since the beginning of the month.
With two weeks to go until the monthly close, Bitcoin’s ultimate performance remains anyone’s guess. 3.5%, while far from pitiful, would still be Bitcoin’s weakest October since 2018.
Data from CoinGlass further shows that 2014, the worst October ever, saw Bitcoin lose “only” 12%, with the potential for a new red record if conditions worsen.
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.
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