Bitcoin (BTC) starts the last week of “Uptober” in a firmly average mood as the trading range to end all trading ranges continues to stick.After a wel
Bitcoin (BTC) starts the last week of “Uptober” in a firmly average mood as the trading range to end all trading ranges continues to stick.
After a welcome attempt to break out, BTC/USD remains bound to a narrow corridor now in place for weeks.
Some of the lowest volatility in history means that Bitcoin has found a temporary function as a “stablecoin” — even some major fiat currencies are currently more volatile.
The longer the status quo drags on, however, the more convinced commentators are that a major trend change will enter.
This week is as good as any, they argue — macroeconomic data, geopolitical instability and classic volatility around the monthly close are all factors at play when it comes to shaking up a decidedly boring Bitcoin market.
Bulls have their work cut out to make sure that such a breakout is to the upside — multi-week trading ranges offer stiff resistance, while behind the scenes, miners are suggesting that a capitulation could yet take everyone by surprise sooner rather than later.
Cointelegraph takes a closer look at the current market setup and highlights five topics to bear in mind while tracking BTC price action this week.
Highest weekly close since early September
Bitcoin offered some interesting price behavior into the Oct. 23 weekly close, BTC/USD seeing its largest “green” hourly candle in days before topping out at $19,700.
A retracement was already in progress at the close, which nonetheless managed to become Bitcoin’s highest since early September at around $19,580, data from Cointelegraph Markets Pro and TradingView shows.
Optimism accompanied the move, which by Oct. 24 had dissipated to leave Bitcoin more or less where it had been before.
For Michaël van de Poppe, founder and CEO of trading firm Eight, the time has come to say goodbye to rangebound BTC.
“Bitcoin still stuck in this range,” he told Twitter followers the day prior.
“Coming week is a large one with all the events, which almost makes it inevitable that we’ll break out of the range. I’m watching this final resistance. It needs to break, and then, the party can start.”
Order book data told a similar story. Analyzing trader behavior on major exchange Binance, Maartunn, a contributor to on-chain analytics platform CryptoQuant, flagged whales draining liquidity from the established price corridor.
“Liquidity from the range has been removed, or at least significantly reduced,” he summarized, adding that “Whales ($100k ~ $1M) are selling down.”
Material Indicators, which tracks order book liquidity changes, further noted that the resistance level corresponding to Bitcoin’s old all-time high from 2017 had softened.
“First retest of the 2017 Top failed, but the sell wall that was forming resistance at that level has been diffused into a ladder upward,” it explained just before the weekly close.
Popular trader and analyst Jackis meanwhile predicted a “wild” November for Bitcoin, while not being drawn on whether the move would be up or down.
“Bitcoin price has found an equilibrium around 19K. After a prolonged EQ there always comes a time of displacement,” he wrote at the weekend.
“Watch for a prolonged period of price acceptance above/below 19,5K/18,5K and position accordingly.”
Fed, ECB in focus in run-up to rate hike decision
Van de Poppe’s promise of a “large” week in terms of macroeconomic events will likely bear fruit on Oct. 28 with the release of United States Personal Consumption Expenditures (PCE) Index for September.
While traditionally not as impactful to crypto markets as the Consumer Price Index (CPI), PCE nonetheless comes at a critical point this time around.
The week after will see the Federal Reserve meet to decide on interest rate hikes, these based on specific data inputs including PCE and CPI.
The market currently overwhelmingly expects another 75-basis-point hike — keeping pressure on risk assets including Bitcoin — but last week already saw rumors of a softening of the Fed’s stance to come.
Any loosening of policy would be a boon to stocks, something which highly-correlated crypto markets would naturally benefit from.
“The average Bitcoin bear market lasts 12.5 months. This is called the Golden Bull Cycle ratio,” hopeful developer James Bull commented at the weekend.
“We are now at month 11 and the FED is considering to stop the hiking of interest rates.”
Summarizing expectations from the Fed, meanwhile, Charlie Bilello, founder and CEO of Compound Capital Advisors, confirmed that 75 basis points was not tipped to make a reappearance after early November.
“Rate cuts start in Dec 2023, continue in 2024,” he added.
CME Group’s FedWatch Tool had the chance of 75 basis points…
cointelegraph.com