The Most Unstable ‘Uptober’ — 5 Things You Need To Know About Bitcoin This Week

Bitcoin (BTC) starts the final week of ‘Uptober’ in a solidly average mood as the trading range that ends all trading ranges remains sticky.

After a welcome attempt to breakout, BTC/USD remains locked in a narrow passage for weeks.

Some of the lowest volatility in history means Bitcoin has found a temporary function as a ‘stable coin’.

But the longer we maintain the status quo, the more confident we become that a major trend change will occur.

Macroeconomic data, geopolitical instability, and typical volatility around monthly closes are all contributing factors, they argue, when it comes to shaking up the decidedly boring Bitcoin market.

The bulls have their work cut out to ensure that such breakouts turn upside — while the multi-week trading range provides stiff resistance, behind the scenes, miners will capitulate sooner or later. It suggests that it has the potential to surprise everyone.

Cointelegraph takes a closer look at the current market composition and highlights five topics to keep in mind when tracking Bitcoin price movements this week.

Highest weekly close since early September

Bitcoin showed some interesting price action heading into its weekly close on Oct. 23, with BTC/USD showing its biggest ‘green’ hour candle in days before reaching $19,700.

Bitcoin hit its highest level since early September at around $19,580, according to Cointelegraph Markets Pro and TradingView data, even though the close was already underway.

There was some optimism about the move, but by October 24th Bitcoin was almost back to where it was before.

For Michael van de Poppe, founder and CEO of trading company Eight, it’s time to say goodbye to range-bound BTC.

“Bitcoin is still stuck in this range,” he said Said Twitter followers from the previous day.

“Next week is a massive week with all the events and it’s almost inevitable that we’ll get out of the range. I can do it.”

The order book data tells a similar story. under analysis Following the behavior of traders on major exchange Binance, Martin, a contributor to on-chain analytics platform Cryptoquant, has flagged a whale that is draining liquidity from established price corridors.

“Liquidity from the range has been removed, or at least significantly reduced,” he summed up, adding that “whales ($100,000 to $1 million) are being sold down.”

Material Indicators, which tracks changes in order book liquidity, further noted that the resistance level corresponding to Bitcoin’s all-time highs from 2017 has softened.

“Although the top’s first retest of 2017 failed, the sell-off wall that had formed resistance at that level diffused into the upward ladder.” explained Just before closing every week.

Meanwhile, popular trader and analyst Jackie predicted November is a “wild” month for Bitcoin, but it doesn’t paint a picture of whether the move will go up or down.

“Bitcoin price has found equilibrium at around 19,000. After a prolonged EQ, there will always be time for displacement,” he says. I have written On the weekend.

“We will monitor the lengthening acceptance period for prices above/below 19,5K/18,5K and set positions accordingly.”

Fed and ECB in focus as they prepare for rate hike decision

Van de Poppe’s promise of a ‘big’ week in terms of macroeconomic events could come to fruition with the release of the US Personal Consumption Expenditures (PCE) Index on October 28th.

Traditionally, the consumer price index (CPI) has not had as much impact on the cryptocurrency market, but PCE has come to a point this time.

Next week, the Federal Reserve will decide to raise interest rates. These are based on specific data inputs such as PCE and CPI.

The market is now overwhelmingly anticipating a 75 basis point rate hike, keeping pressure on risk assets, including Bitcoin, but we’ve already seen rumors last week that the Fed’s stance will soften.

Easing policy will benefit equities and the highly correlated crypto markets will rightly benefit.

“The average Bitcoin bear market lasts 12.5 months. This is called the Golden Bull Cycle ratio,” says prospective developer James Bull. commented On the weekend.

“It is now March 11 and the Fed is considering stopping rate hikes.”

wrap up Meanwhile, Charlie Birello, founder and CEO of Compound Capital Advisors, confirmed that the 75 basis points haven’t tilted to reappear since early November.

“The rate cuts will start in December 2023 and continue until 2024,” he added.

CME Group’s FedWatch tool had a 90.5% chance of 75 basis points in November at the time of writing.

Outside the US, the European Central Bank press conference and President Christine Lagarde’s speech will take place on October 27th.

The Eurozone is currently dealing with record inflation, exceeding 20% ​​in some EU member states. But the ECB is clearly slower than his Fed in reacting to rate hikes.

“The ECB on Thursday expected a rate hike of 75bps. However, the balance sheet reduction QT will be delayed until the neutral rate is reached (at least in the second half of 2023) from 1.5% to 2% versus the current 0.75%,” economists said. said Daniel Lacalle of murmured about the current situation.

“The ECB is still lagging behind.

“Ripped” Hashrate Leads to Russian Questions

Back inside Bitcoin, there are growing concerns about the fundamentals of the network and the health of the mining sector.

Looking at the data leads to an unusual but not entirely welcome conclusion. Hash rates may reach all-time highs, but that growth may be unsustainable and costly.

Miners are dedicating more and more computing power to the blockchain, even though spot price movements are generally declining.

This means that already thin profit margins are being further squeezed, and smaller miners risk losing their financial incentives and having to abandon ships.

We can also assume that the entity adding hashrate has enough capital to make a profit despite the current state of the network.

“Bitcoin hashrate is absolutely ripped,” said William Clemente, co-founder of research firm Reflexivity Research. I have written On the weekend.

“Think of who this entity is that finds it advantageous to mine with BTC prices down 70%, energy prices high, and hash prices at all-time lows. Or is it a large player with access to very cheap energy?”

With that in mind, commentator Steve Barber came to an unusual conclusion.

“It’s Russia, folks. Russia is where hashrate is headed,” he said. claimed.

“Manufacturers recently admitted to selling more ASICs to Russia than to the US, but what if we blow up the energy in pipelines and bottlenecks? Bitcoin fixes that.”

The entity or entity remains a mystery, but the numbers speak for themselves. According to monitoring resource MiningPoolStats, the hashrate is currently over 270 exahash per second (EH/s), while BTC.com provides his 259 EH/s estimate.

Thanks to the added hashrate, the difficulty increased by another 3.44% on October 24, reaching an all-time high of 36.84 trillion.

So far, however, the old adage that “price follows hashrate” has yet to be proven due to growing concerns about sustainability.

Rapid increase in supply loss

Even if miners haven’t yet delved into the surrender world, it is already “here” for the average Bitcoin hodler, one analyst firm believes.

Looking at the data covering the loss-stricken BTC supply, trading resource Game of Trades concluded that the pain of the bear market has already begun.

BTC’s 30-day rolling moving average is currently near an all-time high as it doesn’t take into account lost coins or coins held over time.

“Surrender Is Here”, Game of Trade wrap up on Twitter.

“Total supply of BTC at the 30-day moving average of losses hits its second-highest level ever.”

According to the attached chart from on-chain analytics firm Glassnode, the loss amounted to over 8 million BTC.

Responses emphasized that the numbers would be lower if they used the distribution supply, if they also used Game of Trade Admit The June low of $17,600 still constituted a ‘major surrender event’.

Supply issues are getting more prescient — and Glassnode too Confirm BTC supply that has been dormant for at least 5 years is higher than ever at 25.47%.

Uptober? what uptober?

By comparison, there’s little interest in the failed delivery of “Uptober” compared to October 2021.

RELATED: Global Recession Could Last Nearly 2024 Bitcoin Halving — Elon Musk

At current prices, BTC/USD is only 0.36% off the start of the month. This represents how unstable Bitcoin has become.

Data resource Coinglass data shows that October 2022 will be the flattest on record, eclipsing last year’s 40% increase.

Those hoping for a dramatic turnaround in November cut their jobs.

2020, on the other hand, sees BTC/USD gain 43% in November, while the Crown belongs to 2017’s 53.5% gain.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading movements involve risk. You should do your own research when making a decision.