Bitcoin (BTC) is kicking off the last week of October in classic style, as a 3% Bitcoin price gain sends cryptocurrency markets higher.
In what could turn out to be a classic “Uptober” for Bitcoin and altcoins, BTC/USD is back near its 2023 highs as the resistance battle rages on. Can the Bulls win?
That’s the key question for traders and market watchers as the first Wall Street open approaches this week as Asia sets the tone for a crypto comeback.
However, given how much resistance there is to overcome, traders are playing it safe – the high outlook for Bitcoin prices is less clear than might be expected, and few believe the path above $32,000 will open up quickly or easily.
Bitcoin must also avoid potential headwinds in the form of printed macroeconomic data at a time when inflation continues to exceed expectations.
Ahead of the US Federal Reserve’s interest rate decision on November 1, this month’s final readings will be more important. At the same time, geopolitical events add another element to the market’s unpredictability.
With so much at stake for cryptocurrencies and risk assets, the week looks set to be a rollercoaster in the making as Bitcoin bulls seek a major trend change with a breakout from a multi-month trading range.
Relative Strength Index Gives Bitcoin Traders Cold Feet on the Rally
As Cointelegraph reported, three-month highs are being treated with suspicion by some traders, who see breaking the $32,000 level as a difficult challenge.
“Well, we’re on our way to the top of the range for 2023,” said popular trader Daan Crypto Trades Sum it up At X per day.
“It won’t be easy to break $31k-$32k, but when I do I will target $38k then. It remains range-bound until then.”
With hours to go until Wall Street opens, BTC/USD is now pulling back from its highs, on its way back towards the $30,000 mark.
Analyzing the possibilities of a deeper pullback, popular trader Ali drew attention to the Relative Strength Index (RSI) readings.
“It appears that an imminent price correction is looming unless BTC manages to register a daily candle close above $31,560,” reads part of his comments. to caution.
At 77 on October 23, the RSI was already at levels that Ali noted had led to “sharp corrections” since March of this year. As a general rule, anything above 70 is considered “overbought.”
Others were freely optimistic, including Philip Swift, co-founder of trading group DecenTrader and creator of the Look Into Bitcoin statistics resource.
#Bitcoin + 30 thousand dollars.
Goodbye bears.
– Philip Swift (@PositiveCrypto) October 23, 2023
Meanwhile, popular trader CredibleCrypto described the Bitcoin hack as “almost there.” By updating the idea in late August, he suggested that $30,000 is the key level that needs to be broken for a trend change.
Almost there… $ Bitcoin https://t.co/13X3yX7Bib
— Credible Crypto (@CredibleCrypto) October 23, 2023
Bitcoin saw a strong start to the final week of “Uptober” with a trip to nearly $31,000, data from Cointelegraph Markets Pro and TradingView showed.
Personal consumption expenditures and GDP are scheduled to be released in the lead-up to the FOMC meeting
Personal Consumption Expenditures (PCE) data is making major US headlines this week – and the timing is very clear.
The Federal Reserve is scheduled to meet to decide on interest rate policy on November 1, and as one of its preferred measures of inflation, personal consumption expenditures are closely watched for signals from the markets. Third quarter GDP is also due.
Although recent data has consistently come in higher than expected, confirming steady inflation, the odds of raising interest rates remain slim. According to data from CME Group’s FedWatch tool, there is a 1.6% chance of a rate cut by the Federal Open Market Committee (FOMC) next week.
“At the same time, earnings season is in full swing and Fed speculation continues. “Volatility is great for traders,” financial commentary source The Kobeissi Letter wrote in part of the commentary on this week’s macroeconomic notes.
Main events this week:
1. Building permits – Wednesday
2. New Home Sales – Wednesday
3. Fed Chairman Powell’s speech – Wednesday
4. GDP for the third quarter of 2023 – Thursday
5. Pending Home Sales – Thursday
6. Inflation data for September – Friday
We are one week away from the Federal Reserve’s November meeting.
– Al Qubaisi Letter (@KobeissiLetter) October 22, 2023
At the same time, Scio and others are eyeing a stronger US dollar, as the US Dollar Index (DXY) has cooled the rampant uptrend that began in mid-July.
“We look for a continuation of the trend or a clear breakout of the 1D trend sometime this week or into November,” part of the comments advertiser.
Skew added that a “big move” should come soon.
Exchange balances show ‘clear trend’
A trend of declining Bitcoin balances on exchanges is frequently reported as it reaches levels not seen since 2018.
According to the latest data from on-chain analytics platform CryptoQuant, the major exchanges now have a combined Bitcoin balance of 2,024 million BTC.
The FTX collapse in November 2022 accelerated the pace of the balance decline, and although BTC prices have rebounded this year, the trend has yet to reverse.
Now, exchange deposits are at their lowest levels since the beginning of the year, notes James Stratten, a research and data analyst at cryptocurrency insights firm CryptoSlate.
“Since Bitcoin began, deposits have consistently outperformed withdrawals. However, with the FTX collapse on November 22 and the SVB crisis on March 23, the trend reversed for the first time. is reading.
“Now, with deposits at their lowest levels since the beginning of the year and withdrawals stable but high, a clear trend is emerging: coins are steadily leaving exchanges.”
The accompanying chart showed the proportion of Bitcoin transactions involving exchanges, representing 36% of the total.
Bitcoin “newbies” are absent this month
CryptoQuant research warns that Bitcoin price action, while beneficial to market sentiment, exhibits “artificial” characteristics.
In a Quicktake market update on October 22, shareholder SignalQuant revealed a decline in the number of new entrants to the market over the past month.
SignalQuant used the Sum Coin Age Distribution metric – a method of separating newer and older Unspent Transaction Output (UTXO) data.
“Interestingly, when this indicator rises, it represents a turning point for the price of Bitcoin in the long term,” he wrote of the week-to-month-old outputs, which correspond to “newbies” in the market.
“In fact, the 1W-1M Entry Trend Index was above the baseline when BTC bottomed in late 2018, when it bottomed in late 2022, and after the Covid crash on March 20. But Now, instead of heading towards the baseline, the price stays lower.
SignalQuant concluded that although no single indicator can provide a comprehensive explanation of market behavior, Coin Sum data was “too important to ignore.”
Previously, Cointelegraph noted that long-term holders now control more Bitcoin supply than ever before.
Market fear is absent in a “scary zone” for Bitcoin
After a long period of barely any movement, the Fear and Greed Cryptocurrency Index is starting to show signs of volatility.
Over the weekend, the classic cryptocurrency sentiment gauge rose into “greed” territory, reaching 63/100 – its highest reading since July 12.
The increase coincided with Bitcoin’s attempts to break through the $30,000 level over the weekend, reinforcing the importance of this price level in traders’ minds.
In this thread, the famous Altcoin trader Sherpa described $30,000 as “scary territory.”
“I still find this next high to be very important when seeing where the price is headed.” Tell …
Like others, Altcoin Sherpa highlighted $32,000 as the final line in the sand through which bulls can advance.
“Basically, if we break 32K aggressively, we will go to 40K.” I continued.
“If we form a lower high here or reject around 32K strongly, I think we will hit a low of 20K. 40K but 32K is a very strong level overall and I don’t feel strong about it,” says Gut.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.