BTC price nears 2023 high — 5 things to know in Bitcoin this week
Bitcoin (BTC) starts the last week of October in classic style as 3% BTC price gains lift the cryptocurrency markets.
In what could be a classic “Uptober” for Bitcoin and altcoins yet, BTC/USD is rebounding as a defensive battle at the 2023 highs. Can the bulls win?
That's the key question for traders and market watchers heading into the first week of Wall Street as Asia sets the tone for crypto's comeback.
Considering the amount of resistance to overcome, however, traders are playing it safe, the higher BTC price forecast is lower than expected, and few believe that the road above $32,000 will open quickly or easily.
As inflation continues to beat expectations, Bitcoin should avoid potential headwinds in the form of macroeconomic data releases.
Month-end publications will be more relevant ahead of the US Federal Reserve's interest rate decision on November 1. Geopolitical events, meanwhile, add another element of uncertainty to markets.
With so much at stake for crypto and risk assets, the week looks to be a rollercoaster as Bitcoin bulls look to break out of a multi-month trading low and look for a major trend reversal.
RSI gives Bitcoin traders cold feet over Rally
According to Cointelegraph, these three-month highs are being treated with skepticism by some traders who consider breaking $32,000 a tough challenge.
“Well, it's going to the 2023 high territory,” noted day trader Dan CryptoTrades on X (formerly Twitter).
“Breaking $31K-32K won't be easy, but when I do, I'll target $38K next. Until then, it will remain out of range.
With hours to go until the Wall Street open, BTC/USD is now retreating from its highs, on its way back to the $30,000 mark.
Analyzing the possibilities of a deeper downtrend, the famous trader Ali paid attention to the Relative Strength Index (RSI) readings.
“As long as BTC fails to close a daily candle above $31,560, an impending price correction appears to be on the horizon,” the comments section warned.
At 77 on Oct 23, the RSI was already at levels that Ali said had triggered “sharp corrections” since March of this year. As a rule, anything over 70 is considered “overbought.”
Others were liberally optimistic, including Philip Swift, co-founder of trading suite DecenTrader and creator of Statistics Resources.
#Bitcoin +30 thousand dollars
Goodbye bears.
— Philip Swift (@PositiveCrypto) October 23, 2023
Prominent trader CredibleCrypto, on the other hand, stated that the Bitcoin crash is “about to get there”. Updating his thoughts from late August, he suggested that $30,000 is a key level to break out for a trend reversal.
Almost there… $ BTC https://t.co/13X3yX7Bib
— CrediBULL Crypto (@CredibleCrypto) October 23, 2023
Bitcoin saw a strong start to the last week of “Uptober” with a trip around $31,000, data from Cointelegraph Markets Pro and TradingView shows.
PCE and GDP until the FOMC
Personal consumption expenditures (PCE) index data headlines the US macro calendar this week – and the timing is notable.
The Fed is set to meet on November 1 to decide on interest rate policy, and as one of the preferred inflation gauges, PCE is eagerly awaited by markets for clues. So is third quarter GDP.
Although previous recent data releases have highlighted a stronger-than-expected rise in inflation, the chances of further acceleration are 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.
“Meanwhile, earnings season is in full swing, and the Fed's estimates will continue. “Volatility is very good for traders,” financial opinion source Kobeisi's letter wrote in part in an opinion piece in the weekly Macro Diary.
Key events this week:
1. Building permits – Wednesday
2. New Home Sales – Wednesday
3. Chairman of the Federation Paul speaks – Wednesday
4. Q3 2023 GDP – Thursday
5. Pending Home Sale – Thursday
6. September PCE inflation data – Fri
We are 1 week away from the November Federation meeting.
— Kobeissi Letter (@KobeissiLetter) October 22;
Skew and others are watching the strength of the US dollar, with the US Dollar Index (DXY) slowing the rally that began in mid-July.
Looking for trend continuation or a clear 1D trend break this week or into November, the comments section stated.
Skew added that a “big step” should come soon.
The exchange rates show a “clear trend”.
A trend of decreasing BTC balances has been reported repeatedly, hitting levels not seen since 2018.
According to the latest data from the chain analysis platform CryptoQuant, the major trading platforms now have a combined BTC balance of 2.024 million BTC.
In the year The meltdown of FTX in November 2022 has accelerated the rate of inventory reduction, and despite the recovery of the BTC price this year, the trend has yet to reverse its trajectory.
Right now, exchange deposits are at a year-over-year low, James Straten, research and data analyst at crypto insights firm CryptoSlate, notes.
“Since Bitcoin's inception, deposits have consistently outperformed withdrawals. However, with the collapse of FTX on November 22 and the SVB crisis on March 23, the trend reversed for the first time,” read part of X's post over the weekend.
“Now, with deposits hitting YTD lows and withdrawals steady and high, a clear trend has emerged: coins are leaving exchanges.”
The accompanying chart shows that BTC transactions involving exchanges account for 36% of the total.
There are no Bitcoin “newbies” this month
BTC's price action, while useful for market sentiment, is exhibiting “artificial” characteristics, warns CryptoQuant Research.
In one of Quicktake's market updates on October 22, contributor SignalQuant pointed to a lower market earnings number last month.
SignalQuant used the Sum Coin Age Distribution metric – a method of distinguishing between new and old unused transaction output (UTXO) data.
“Interestingly, when this indicator rises, the price of BTC is in a long-term trend,” he wrote about the results for a period of one week to a month, corresponding to the market's “newbies”.
“In fact, the 1w~1m entry trend indicator was when the price of BTC dropped in late 18, during the low in late 22 and above the threshold after the March 20 covid crisis. But now, instead of heading towards the baseline, it is getting lower,” he said.
SignalQuant concluded that while no single indicator can provide a comprehensive explanation of market behavior, the coin's aggregate data is “too valuable to pass up.”
Previously, long-term owners of Cointelegraph now control the supply of BTC more than ever before.
Market fear is not in a “scary place” for Bitcoin.
After an extended period of no activity, the Crypto Fear & Greed Index is starting to show signs of volatility.
Over the weekend, the popular crypto sentiment gauge entered “greed” territory, reaching 63/100 – its highest reading since July 12.
The increase coincided with Bitcoin's attempt to break $30,000 over the weekend, reinforcing the price level's importance in traders' minds.
On that topic, prominent trader Altcoin Sherpa described $30,000 as a “scary environment.”
“I still see it as very important where this next peak goes,” he told X subscribers on the day, adding that “we're close to seeing whether we'll see 20k or 40k in the medium term.”
Like many others, Altcoin Sherpa highlighted $32,000 as the final line in the sand where bulls will pay.
“Essentially, if we break 32k hard, we'll go to 40k,” he continued.
“I think if we make a low high around here or hold tight around 32k, we'll go to the low 20k. Gut says 40k but 32k is generally a very strong level and I don't think it's strong on this one.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
