Bitcoin (BTC) begins the last week of October in classic style as 3% BTC price gains send cryptocurrency markets higher.
In what could yet prove to be a classic “Uptober” for Bitcoin and altcoins, BTC/USD is back near 2023 highs as a resistance battle brews. Can the bulls win?
That’s the key question for traders and market watchers heading into Wall Street’s first open of the week, as Asia sets the tone for a crypto comeback.
However, given the magnitude of resistance to overcome, traders are playing it safe, with high BTC price predictions less clear than expected, and few believing the road beyond $32,000 s will open quickly or easily.
Bitcoin must also avoid potential headwinds in the form of macroeconomic data prints at a time when inflation continues to exceed expectations.
Ahead of the US Federal Reserve’s interest rate decision on November 1, the month’s final figures will be all the more significant. Geopolitical events, meanwhile, add another element to the unpredictability of markets.
With much at stake for crypto and risk assets, the week therefore appears to be a roller coaster in the making as Bitcoin bulls look to make a major trend change via a breakout of a multi-month trading range.
The RSI gives Bitcoin traders cold feet in the face of the rally
Like Cointelegraph reportedThese three-month highs are treated with suspicion by some traders, who view breaking through $32,000 as a difficult challenge.
“We are on track towards the top of the 2023 range,” popular trader Daan Crypto Trades summary on X (formerly Twitter) that day.
“$31,000 to $32,000 won’t be easy to break through, but in doing so I would aim for $38,000 next. Stay limited until then.
A few hours before Wall Street opens, BTC/USD is now retreating from the highs, on its way back towards the $30,000 mark.
Analyzing the chances of a larger decline, popular trader Ali drew attention to the relative strength index (RSI) readings.
“An impending price correction appears to be on the horizon unless BTC manages to close a daily candlestick above $31,560,” is part of his comments. warned.
At 77 on October 23, the RSI was already at levels that Ali said had triggered “strong corrections” since March of this year. Generally, anything above 70 is considered “overbought.”
Others were freely optimistic, including Philip Swift, co-founder of the DecenTrader trading suite and creator of the Look Into Bitcoin statistical resource.
– Philippe Swift (@PositiveCrypto) October 23, 2023
Popular trader CredibleCrypto, meanwhile, described a Bitcoin breakout as “almost here.” Updating an idea from late August, he suggested that $30,000 was the key level to cross for a change in trend.
– CrediBULL Crypto (@CredibleCrypto) October 23, 2023
PCE and GDP expected as the FOMC approaches
Personal consumption expenditures (PCE) index data tops the U.S. macroeconomic news this week – and the timing is striking.
The Fed is scheduled to meet to decide on interest rate policy on November 1, and as one of its favorite inflation indicators, the PCE is closely monitoring market signals. The third quarter gross domestic product figure is also expected.
Despite recent releases of persistently better-than-expected data, highlighting persistent inflation, the chances of further rate hikes remain negligible. By data According to the CME Group’s FedWatch tool, there is even a 1.6% chance that the Federal Open Market Committee (FOMC) will cut rates next week.
“Meanwhile, earnings season is in full swing and Fed speculation continues. Volatility is great for traders,” wrote financial commentary resource The Kobeissi Letter in part of a commentary on this week’s macroeconomic journal.
Key events this week:
1. Building permit – Wednesday
2. New home sales – Wednesday
3. Fed Chair Powell speaks – Wednesday
4. Third quarter 2023 GDP – Thursday
5. Pending Home Sales – Thursday
6. September PCE inflation data – Friday
We are a week away from the November Fed meeting.
– Kobeissi Letter (@KobeissiLetter) October 22, 2023
Skew and others, meanwhile, are looking at the strength of the U.S. dollar, with the U.S. Dollar Index (DXY) cooling the wild uptrend that began in mid-July.
“Looking for a continuation of the trend or a clear break from the 1D trend this week or in November,” is one of the comments declared.
Skew added that a “major move” is expected to come soon.
Foreign exchange balances show “clear trend”
The trend of drop in BTC balances on exchanges is frequently reported as they reach levels not seen since 2018.
According to According to the latest data from on-chain analytics platform CryptoQuant, major trading platforms now have a combined BTC balance of 2.024 million BTC.
The FTX collapse in November 2022 accelerated the pace of balance reduction, and despite BTC price recovery this year, the trend has yet to reverse direction.
Today, foreign exchange deposits are at their lowest since the start of the year, notes James Straten, research and data analyst at cryptocurrency analytics firm CryptoSlate.
“Since Bitcoin’s launch, deposits have consistently exceeded withdrawals. However, with the collapse of FTX in November 2022 and the SVB crisis in March 2023, the trend has reversed for the first time,” as part of a weekend X article. read.
“Now, as deposits reach their lowest level since the beginning of the year and withdrawals are stable but high, a clear trend is emerging: coins are gradually leaving exchanges.”
An attached chart shows the proportion of BTC transactions involving exchanges making up 36% of the total.
Bitcoin “newbies” absent this month
BTC price action, while beneficial for market sentiment, has “artificial” characteristics, CryptoQuant research warns.
In one of his Quick take Market updates on October 22, contributor SignalQuant revealed a low number of new market entrants over the past month.
SignalQuant used the Sum Coin Age Distribution metric – a method of separating the most recent and oldest unspent transaction output (UTXO) data.
“Interestingly, when this indicator peaks, it is a turning point for the BTC price in the long term,” he wrote of outflows dating from a week to a month, corresponding to “beginners” of the market.
“In fact, the 1w~1m entry trend indicator was above the baseline when the BTC price bottomed in late ’18, when it bottomed at the end of 22 and after the Covid crash in March 20. But now, instead of getting closer to the baseline level, it remains low. »
SignalQuant concluded that while no single indicator can provide a comprehensive explanation of market behavior, the sum-of-parts data was “too important to ignore.”
Previously, Cointelegraph noted that long-term holders are now in control more BTC supply than ever before.
Market Fear Is Absent in a “Scary Zone” for Bitcoin
After a long period of almost no movement, the Crypto Fear & Greed Index is starting to decline. to show signs of volatility.
Over the weekend, the classic crypto sentiment indicator reached “greed” territory, hitting 63/100 – its highest reading since July 12.
The increase coincided with Bitcoin’s attempts to breach the $30,000 mark over the weekend, reinforcing the importance of this price level in traders’ minds.
On this subject, popular Altcoin trader Sherpa described $30,000 as a “scary zone.”
“I still view this next high as extremely important to see where the price goes,” he said. said X subscribers that day, adding that “we are about to see if we will see 20,000 or 40,000 in the medium term”.
Like others, Altcoin Sherpa highlighted $32,000 as the ultimate limit for bulls to cross.
“Basically, if we break 32k significantly, we go to 40k,” he says. continued.
“If we form a lower high here or if we reject strongly around 32,000, I think we’re going to hit a low of 20,000. Gut says 40 km, but 32 km is a very strong overall level and I don’t don’t feel strong about it.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.