$30,664 starts the last week of October in classic style as 3% BTC price gains take cryptocurrency markets higher.
In what could yet turn out to be a classic “Uptober” for Bitcoin and altcoins, BTC/USD is back near 2023 highs as a resistance battle brews. Can the bulls win?
That is the key question for traders and market observers going into the week’s first Wall Street open as Asia sets the tone for a crypto comeback.
Given the extent of resistance to overcome, however, traders are playing it safe, with lofty BTC price predictions less evident than expected, and few believe that the road beyond $32,000 will open up quickly or easily.
Bitcoin must also dodge potential headwinds in the form of macroeconomic data prints at a time when inflation continues to beat expectations.
Ahead of the United States Federal Reserve’s interest rate decision on Nov. 1, the month’s final prints will be all the more significant. Geopolitical events, meanwhile, add another element to market unpredictability.
With much at stake for crypto and risk assets, the week thus looks to be a rollercoaster in the making as Bitcoin bulls seek to effect a major trend change via a breakout from a multimonth trading range.
BTC/USD 1-day chart. Source: TradingView
these three-month highs are being treated with suspicion by some traders, who see breaking through $32,000 as a difficult challenge.
“Well on it’s way towards the top of the 2023 range,” popular trader Daan Crypto Trades summarized on X (formerly Twitter) on the day.
“$31K-32K won’t be easy to break through but upon doing so I would be targeting $38K next. Remains range-bound until then.”
With hours to go until the Wall Street open, BTC/USD is now retreating from the highs, on the way back toward the $30,000 mark.
Analyzing the odds of a deeper drawdown, popular trader Ali drew attention to relative strength index (RSI) readings.
“An impending price correction appears to be on the horizon unless BTC manages to clock a daily candlestick close above $31,560,” part of his comments warned.
At 77 on Oct. 23, RSI was already at levels that Ali noted had triggered “sharp corrections” since March this year. As a rule, anything above 70 is considered “overbought.“
BTC/USD chart with RSI. Source: Ali/X
Others were freely optimistic, including Philip Swift, co-founder of the trading suite DecenTrader and creator of the statistics resource Look Into Bitcoin.
Popular trader CredibleCrypto meanwhile described a Bitcoin breakout as “almost there.” Updating an idea from late August, he suggested that $30,000 was the key level to break for a trend change.
PCE and GDP due in run-up to FOMC
Personal Consumption Expenditures (PCE) Index data headlines the U.S. macro diary this week — and the timing is conspicuous
The Fed is due to meet to decide on interest rate policy on Nov. 1, and as one of its preferred inflation metrics, PCE is being keenly eyed for cues by markets. The gross domestic product figure for the third quarter is also due.
Despite previous recent data prints persistently coming in higher than expected, underscoring sticky inflation, the odds of further rate hikes remain negligible. Per data from CME Group’s FedWatch Tool, there is even a 1.6% chance of a rate cut by the Federal Open Market Committee (FOMC) next week.
The FTX meltdown in November 2022 hastened the pace of balance reduction, and despite the BTC price recovery this year, the trend has yet to reverse direction in step.
Now, exchange deposits are at year-to-date lows, James Straten, research and data analyst at crypto insights firm CryptoSlate, notes.
“Since Bitcoin started, deposits consistently outpaced withdrawals. However, with the FTX collapse in Nov ’22 and the SVB crisis in Mar ’23, the trend flipped for the first time,” part of an X post at the weekend read.
“Now, with deposits hitting YTD lows and withdrawals stable yet high, a clear trend emerges: coins are steadily leaving exchanges.”
Bitcoin exchange transaction dominance chart. Source: James Straten/X
An accompanying chart showed the proportion of BTC transactions involving exchanges accounting for 36% of the total.
Bitcoin “newbies” absent this month
BTC price action, while advantageous for market sentiment, is displaying “artificial” characteristics, CryptoQuant research warns.
In one of its Quicktake market updates on Oct. 22, contributor SignalQuant revealed low numbers of new market entrants 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 spikes, it is a turning point for BTC’s price in the long term,” he wrote about outputs between one week and month old, corresponding to market “newbies.”
“In fact, the 1w~1m entry trend indicator was above the baseline when BTC’s price hit its low in late ’18, when it hit its low in late ’22, and after Mar ’20 Covid crash. But now, instead of heading towards the baseline, it’s staying low.”
Bitcoin sum coin age distribution annotated chart. Source: CryptoQuant
SignalQuant concluded that while no single indicator can provide an overall explanation of market behavior, the coin sum data was “too significant to ignore.”
Market fear absent in a “scary area” for Bitcoin
After an extended period of barely any movement, the Crypto Fear & Greed Index is beginning to show signs of volatility.
Over the weekend, the classic crypto sentiment gauge spiked into “greed” territory, reaching 63/100 — its highest reading since July 12.
The increase coincided with Bitcoin’s attempts to break through $30,000 over the weekend, reinforcing the significance of that price level in traders’ minds.
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
popular trader Altcoin Sherpa described $30,000 as a “scary area.”
Like others, Altcoin Sherpa highlighted $32,000 as the ultimate line in the sand for bulls to charge through.
“Basically if we break 32k strongly, we go to 40k,”
“If we form a lower high around here or reject around 32k strongly, I think we’re going to go to low 20ks. Gut says 40k but 32k is a super strong level overall and I don’t feel strong about it.”
BTC/USD annotated chart. Source: Altcoin Sherpa/X
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