Bitcoin (BTC) is still up 4% since the second week of October as geopolitical instability takes center stage.
BTC price action continues to hold steady at $28,000 – as the market reacts to Israel’s war, what happens next?
At a time when risk assets may finally see volatility, Bitcoin has so far failed to react significantly, spending the entire weekend in a tight corridor.
However, that could soon change as oil and gold prices rise as Wall Street opens and the U.S. dollar strengthens.
There is no shortage of macroeconomic triggers, and the US Consumer Price Index (CPI) for September will be released in the next few days. The data becomes even more important for the Fed after last week’s surprise jobs data.
Meanwhile, behind the scenes, on-chain indicators point to interesting times for Bitcoin, as BTC/USD trades within a key range that marks a watershed year from 2021.
Cointelegraph looks at these factors and more in a weekly list of potential BTC price triggers.
Bitcoin ‘illiquid and volatile’ as weekly close passes
Market participants over the weekend were entirely focused on the sudden outbreak of war in Israel, and changes are already brewing as markets reopen.
For Bitcoin, however, the ongoing events have yet to have a noticeable ripple effect, reports Cointelegraph Markets Pro and trading view show.
Since Friday, BTC price action has been concentrated at $28,000, a level that remains key as traders look for a reversal of resistance/support levels.
“Nothing special happened this weekend,” Daan Crypto Trades Summarize X enters the weekly closing price.
“Volume is expected to pick up soon, but ultimately we should hang around this price area until futures reopen tonight.”
further posts famous Bitcoin has yet to decisively break above the 200-week moving average (MA), which stood at $28,176 at the time of writing.
Famous trader Skew described BTC price behavior as “illiquid and volatile” when analyzing the 4-hour chart.
Bitcoin USD 4 hours
These shadows really illustrate how illiquid and volatile the price action is pic.twitter.com/Qq13GsuqfB— Skew Δ (@52kskew) October 9, 2023
“Bitcoin’s bullish flag is still in play, but it will take a long time to play out,” fellow trader Jer continuenarrowed down to monthly performance.
“October is typically the most bullish month of the year, so I still expect a breakout to the upside this month.”
War is Back on Cryptocurrency Watchers’ Radar
However, when it comes to price triggers, the unfolding Israeli conflict has Bitcoin and cryptocurrency market participants expecting most of the volatility to still be coming.
With memories of Bitcoin’s reaction to the February 2022 war in Ukraine, Jelle is cautious about what might happen next for BTC/USD.
“All I know is that the Ukraine war triggered an 8% down candle that was erased within a day,” part of X’s comments that day explained.
Meanwhile, Mike McGlone, senior macro strategist at Bloomberg Intelligence describe Bitcoin is currently showing a “risk-off bias” among traders.
“My bias is that the downward sloping 100-week moving average will probably win the battle against the upward-trending 50-week moving average. The #crudeoil spike is a liquidity stressor,” he wrote on Oct. 8.
At that time, the 100-week and 50-week MAs were $28,938 and $24,890 respectively.
McGlone addressed the unfolding macro asset phenomenon, with gold rising 1% on the day and Brent crude rising 3.25% ahead of the open on Wall Street.
“The market reaction has been quite defensive,” Skew added, noting renewed strength in the U.S. dollar index (DXY), which rose 0.4%.
Last week, the U.S. dollar index hit its highest level since late 2022.
CPI leads ‘big inflation week’
In the US, attention is focused on this week’s macroeconomic data, highlighted by the September Consumer Price Index (CPI) report.
Last week’s employment data showed that employment levels remained resilient despite the Federal Reserve’s anti-inflationary measures, but Bitcoin briefly retreated on concerns that officials would raise interest rates again, further putting pressure on liquidity.
Despite the BTC/USD rally, these concerns remain.
“Thursday’s good CPI data may provide an opportunity to break out of the range, while hot CPI may push us back to the range low, if the Fed may be forced to raise rates by 25 basis points,” part of the popular analysis of the weekend Member CrypNuevo read.
According to data from CME Group Fed Watch Toolthe market is increasingly betting that interest rates will remain at current levels on the November 1 decision day.
In addition to CPI, this week will also see the release of the Producer Price Index (PPI), more unemployment claims and comments from a total of 12 Fed spokespersons. The minutes of the Federal Reserve’s meeting surrounding previous interest rate decisions will also be released on October 11.
Main events this week:
1. September PPI inflation – Wednesday
2. Fed Meeting Minutes – Wednesday
3. CPI inflation in September – Thursday
4. OPEC monthly report – Thursday
5. Thursday’s jobless claims data
6. A total of 12 Federal Reserve speech events
It’s a big week for inflation and the Fed.
— KobeissiLetter (@KobeissiLetter) October 8, 2023
“This is a big week for inflation and the Fed,” the financial commentary resource “The Kobesi Letter” concluded in the X topic.
“In addition, markets will react to geopolitical tensions starting this weekend. Volatility is the new normal.”
NVT signal surges to highest level since 2018
In Bitcoin, the Network Value in Transactions (NVT) signal led the way in on-chain indicator volatility to start the week.
NVT, its creator Dmity Kalichkin describe As Bitcoin’s “P/E ratio,” it aims to estimate the top and bottom of local Bitcoin prices by comparing market capitalization to daily on-chain transaction value.
The latest data from on-chain analytics company Glassnode shows that NVT has reached its highest level in five years – more than 1,750, far exceeding levels seen in early 2023.
NVT has undergone various reforms in recent years, as the dynamics of BTC supply require different guidance numbers to determine price tops.
“If the trend of sidechains and private transactions continues, we can expect fewer and fewer transactions to be captured in the data on the public chain (reducing the relative value of the “T” in NVT),” said Charles Edwards. The founder of Capriole Investments, a quantitative Bitcoin and digital asset fund, wrote in part of his 2019 research.
“This may result in the fair value NVT range increasing over time.”
Cryptocurrency market intelligence platform IntoTheBlock analyzed the NVT peak and believes it represents a broader shift.
“The lens through which we view the value of Bitcoin is changing,” wrote In the weekend.
“Transaction value and volume were once the go-to indicators. However, the recent surge in the NVT ratio suggests that Bitcoin’s value is now independent of transaction utility, hinting at its growing role as a store of value.”
Not afraid, not greedy
Provides fleeting insights into cryptocurrency market sentiment, classic Cryptocurrency Fear and Greed Index Reflecting an overall atmosphere of indecision.
Related: Bitcoin Bull Run Awaits as US Faces ‘Bear Steep’ – Arthur Hayes
The average investor’s attitude towards the market is ambivalent, as the index’s strict adherence to its “neutral” zone illustrates.
As of October 9, the ratio of fear to greed was 50/100—exactly halfway between the two extreme emotions.
Zooming out, recent months have seen some of the least volatility on record.
“You know what to do, when we get into extreme fear and $20,000 in Bitcoin, I’m going to buy in bulk,” popular trader Crypto Tony reacted to the latest data.
“It might take a while, but I feel like Q1/Q2 in 2024 will be the key. If I see a change in behavior, I’ll re-evaluate.”
Crypto Tony mentioned that there are signs that BTC/USD will return to $20,000 for an eventual retest, and then move higher after the block subsidy halving in 2024.
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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