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Coinmarketcap
October 30, 2023
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Bitcoin (BTC) starts a new week at comfortable highs as traders compete for Bitcoin’s upcoming price action.

As macroeconomic uncertainty continues to increase, Bitcoin is consolidating its new trading zone above $30,000.

The highest weekly close since early May 2022 is the latest achievement for the bulls, and so far, bid support has allowed the market to avoid a deep pullback after last week’s surprise 15% gain.

How could the BTC/USD environment change this week?

As Bitcoin approaches its October monthly close, potential volatility catalysts are taking shape – not least due to growing geopolitical instability in the Middle East.

Adding to the hurdles that risk assets have to overcome is the US Federal Reserve, which will decide to adjust interest rates on November 1.

Under the hood, Bitcoin is looking better than ever, and the numbers prove it – the network’s fundamentals are either at or hovering at all-time highs, continuing a trend that has been in trend for much of this year.

With the price surviving a mass profit-taking event at the hands of speculators, it is difficult to shake faith in further upside – but for some, the specter of a $20,000 price collapse still lingers strongly.

Cointelegraph takes a look at these factors and more in our weekly list of potential influences on BTC prices for the coming days.

Countdown to the end of ‘Uptober’

After its highest weekly close in 18 months, Bitcoin continues to consolidate near $34,000 as the week begins.

Last weekend’s rally took Bitcoin’s price action to $34,700, which helped add to Bitcoin’s short liquidations for the day, according to data from monitoring resource CoinGlass.

BTC liquidation chart (screenshot). Source: Coinglass

Despite this, October’s final weekly close was a quiet event compared to the previous week, and with the focus now on the monthly close, market participants will be keen to see if ‘Uptober’ will maintain its bullish status.

Looking at the behavior of the Relative Strength Index (RSI), famous analyst Matthew Hyland was optimistic today.

“Bitcoin’s current position will eliminate any possibility of a bearish divergence forming on a weekly basis later from the previous RSI high,” books In X’s post.

“This is a very good thing for the upside and the worst possible close for the downside.”

The accompanying chart showed the RSI reaching new highs on the weekly time frames. In a previous post, Hyland said a weekly close at current levels would constitute a broader breakout.

The Relative Strength Index, which traditionally acts as an overbought signal at a given price when it is above 70, is at 69.7 at the time of writing, with the BTC/USD price at $34,300, according to data from Cointelegraph Markets Pro and TradingView.

BTC/USD weekly chart with Relative Strength Index (RSI). Source: Trading View

Likewise, popular trader Titan of Crypto was optimistic about what could happen to Bitcoin price strength this week.

In one of his recent updates to X, he used the Ichimoku cloud to say that a breakout towards $40,000 was possible.

As Cointelegraph reported last week, $40,000 is a popular target for bulls, but some are still noticeably surprised by the strength of the recent rally.

Merchant Plantz Argue That it was “wild that we broke 32k with conviction and now find acceptance above 34k.”

“Doubt and disbelief remain,” he continued in part of X’s comment, suggesting that many have retained a bear market mentality.

BTC price drops by $20,000 “worst case scenario”

Despite a week of maintaining higher levels, Bitcoin is far from convincing everyone that it will hold.

As Cointelegraph continues to report, $20,000 is a breakout level that is still on the radar for some market participants.

The location of the CME futures gap and the psychological high of 2017, $20,000, have not left traders’ consciousness seven months after BTC/USD last traded there.

Commenting on the possibility of such a move becoming a reality, famous trader and analyst Rekt Capital said described As a “worst case scenario”.

The time frame for this to happen is the five and a half months remaining until the next subsidy halving occurs.

“That would be a -42% decline from here,” he wrote over the weekend.

“How likely is this to happen? The probability of a worst-case scenario occurring is usually low.

Rekt Capital had previously warned of a potential broad-based decline in BTC prices at the hands of the 2023 double top pattern, and this was later overturned by last week’s move.

Naturally, social media was not short of those who completely ignored the $20,000 return, including CredibleCrypto, which described The possibility is “almost impossible.”

He continued that day that Bitcoin was on its way to “melting” through the $40,000 mark.

Others highlighted the necessary levels that must be maintained to avoid a rapid rollback of recent progress.

“I look for Bitcoin to do a retest of the intermediate range and fluctuating support/resistance levels,” says analyst Mark Cullen books Next to a summary chart.

“If the price breaks back below that, I think a down sweep could still be a possibility. The bulls don’t really want to see BTC trading anytime below 32.5k, but a wick below for liquidity is not out of the question.”

Annotated chart of BTC/USD. Source: Mark Cullen/X

Meanwhile, trader Bintucci said conditions have not changed on longer time frames.

The FOMC interest rate move is due to cryptocurrencies abandoning their correlation with stocks

With growing troubles in the Middle East and the effects of the war increasingly spreading beyond the region, Bitcoin is experiencing its second major conflict in the past two years.

Hodlers have a potential constant source of volatility in the background – something that will clash this week with US macro data.

On November 1, the Federal Reserve will meet to decide whether to raise benchmark interest rates — an event that could itself be a catalyst for short-term volatility.

However, Bitcoin has rejected Fed interest rate decisions in recent months, despite continued inflation that has repeatedly exceeded market expectations.

Fed interest rate target probability chart. Source: CME Group

According to data from CME Group’s FedWatch tool, markets currently expect the Federal Open Market Committee (FOMC) to leave interest rates unchanged this week.

“We have a big week ahead of us,” financial commentary source The Kobeissi Letter wrote in part of its summary.

Kobeci touched on what could become a new headwind for Bitcoin prices – a correction for the S&P 500. The recent divergence in Bitcoin, which was previously linked to stocks, may be tested.

Over the past month, the S&P 500 has lost 4%.

Daily chart of BTC/USD vs. S&P 500. Source: TradingView

However, in a commentary last week, research firm Santiment not only confirmed the stocks’ dwindling correlation, but also said that this in itself was a sign of a returning cryptocurrency bull market.

The difficulty of mining Bitcoin, and the hash rate is higher than previous peaks

As for the basics of the Bitcoin network, there is no reason to stop and think.

In the last automated adjustment on October 30, difficulty increased by 2.35% – reaching another all-time high.

Now at 62.46 trillion, the difficulty reflects that competition among miners is more intense than ever before — as Cointelegraph reports, mining a single bitcoin has never been more complex.

The hash rate tells a similar story, hovering around 493 exahashes per second (EH/s), according to the latest raw data estimates from stats source MiningPoolStats.

Commenting on the performance of both difficulty and hash rate, which are approaching record levels, James van Straaten, research and data analyst at cryptocurrency insights firm CryptoSlate, described the latter’s progress as a “boom.”

Jarran Milrod, a mining analyst at cryptocurrency analysis firm Arcane Research, expects this trend to continue.

“Bitcoin hash rate will likely continue to rise due to price pumping coupled with the fact that miners are trying to outdo each other in upgrading fleets ahead of the halving,” he said.

“I wouldn’t be surprised if we see 500 EH/s before the new year.”

Bitcoin network basics overview (screenshot). Source: BTC.com

Greed matches all-time BTC price highs

Waiting in the wings and competing with the Relative Strength Index (RSI) for upside potential is the classic cryptocurrency sentiment gauge, the crypto-fear and greed index.

RELATED: First Bitcoin ETF Trades at $1.5B as GBTC ‘Discount’ Reverses BTC Price of $69K

After remaining in a tight range for several months in a row, Fear & Greed has made a strong comeback in line with Bitcoin’s rally – but unlike Bitcoin’s price action, it has returned to November 2021 levels.

The latest data shows that the index reached 72/100 in recent days. This falls into the category of “greed” and matches his stance just days after Bitcoin reached an all-time high of $69,000 nearly two years ago.

Fear and greed tend to reach extreme levels before a major trend change in price action occurs.

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.