November 8, 2024

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End of ‘Uptober’ targets $40K BTC price — 5 things to know in Bitcoin this week

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1 year ago admin
End of ‘Uptober’ targets K BTC price — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts a new week at comfortable highs as traders square off over BTC price action to come.

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

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

How could the environment change for BTC/USD this week?

As Bitcoin heads into the October monthly close, would-be volatility catalysts are brewing — not least thanks to the increasing geopolitical instability in the Middle East.

Adding to the hurdles for risk assets to overcome is the United States Federal Reserve, which will decide on interest rate adjustments on Nov. 1.

Under the hood, Bitcoin is looking better than ever, and the numbers prove it — network fundamentals are either at or circling all-time highs, continuing a trend in place for much of this year.

As price survives a mass profit-taking event at the hands of speculators, faith in further upside is proving hard to shake — but for some, the specter of a $20,000 crash is still firmly in play.

Cointelegraph takes a look at these factors and more in the weekly rundown of potential BTC price influencers 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.

A late-weekend surge took BTC price action to $34,700, helping add to the day’s BTC short liquidations, per data from monitoring resource CoinGlass.

BTC liquidations chart (screenshot). Source: CoinGlass

Despite this, the last weekly close of October was a calm event compared to a week prior, and with the monthly close now in focus, market participants will be keen to see if “Uptober” retains its bullish status.

Eyeing relative strength index (RSI) behavior, popular analyst Matthew Hyland was optimistic on the day.

“Current Bitcoin position would eliminate any possibility of bearish divergence forming on the weekly later on off the prior RSI high,” he wrote in an X post.

“This is extremely good for the bullish side and worst possible close for the bearish side.”

An accompanying chart showed RSI hitting higher highs on weekly timeframes. In a previous post, Hyland said that a weekly close at current levels would constitute a wider breakout.

RSI, which traditionally acts as an overbought signal at a given price when above 70, stood at 69.7 at the time of writing, with BTC/USD at $34,300, per data from Cointelegraph Markets Pro and TradingView.

BTC/USD 1-week chart with RSI. Source: TradingView

Similarly buoyant about what could happen to BTC price strength this week was popular trader Titan of Crypto.

In one of his latest X updates, he used the Ichimoku cloud to argue that a breakout toward $40,000 was on the cards.

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

Trader Bluntz argued that it was “wild that we broke 32k with conviction held and have now found acceptance above 34k.”

“The doubt and disbelief is still lingering,” he continued in part of X commentary, suggesting that many retained a bear market mentality.

$20,000 BTC price dive “worst-case scenario”

Despite a week of holding higher levels, Bitcoin is far from convincing everyone that they will endure.

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

The site of both a CME futures gap and the psychologically significant 2017 all-time high, $20,000 has not left traders’ consciousness seven months after BTC/USD last traded there.

Commenting on the prospect of such a move becoming reality, popular trader and analyst Rekt Capital described it as a “worst-case scenario.”

The timeframe for this to occur is the five-and-a-half months remaining until the next block subsidy halving event.

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

“How likely is it that this could happen? Worst-case scenarios typically have a low probability of occurring.”

Rekt Capital had previously warned of a potential extensive BTC price downside at the hands of a double top pattern for 2023; this was subsequently invalidated with last week’s move.

Social media was naturally not short of those disregarding a $20,000 comeback altogether, among them CrediBULL Crypto, who described the eventuality as “near impossible.”

Bitcoin, he continued on the day, was in line to “melt through” the $40,000 mark.

Others highlighted the necessary levels to hold in order to avoid a rapid unwinding of recent progress.

“Looking for Bitcoin to hold this mid range retest and S/R flip,” analyst Mark Cullen wrote alongside a summary chart.

“If it breaks back below then i think the lower sweep could still be on the cards. Bulls don’t really want to see BTC trade for any time back below 32.5k, but a wick below to take liquidity isn’t off the table.”

BTC/USD annotated chart. Source: Mark Cullen/X

Trader Pentoshi, meanwhile, said that conditions had not changed on longer timeframes.

FOMC rate move due as crypto ditches stocks correlation

With trouble increasing in the Middle East and the impacts of war increasingly being felt outside the region, Bitcoin is seeing its second major conflict in the past two years.

Hodlers have a constant potential source of volatility in the background — something that will spar with U.S. macro data this week.

On Nov. 1, the Fed will meet to decide on whether benchmark interest rates should rise — an event that can form a short-term volatility catalyst in its own right.

Bitcoin has nonetheless dismissed Fed rate decisions in recent months, despite persistent inflation repeatedly beating market expectations.

Fed target rate probabilities chart. Source: CME Group

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

“We have a huge week ahead,” financial commentary resource The Kobeissi Letter wrote in part of a summary.

Kobeissi touched on what could become a fresh BTC price headwind — a correction on the S&P 500. Previously correlated with stocks, Bitcoin’s more recent divergence may be put to the test.

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

BTC/USD vs. S&P 500 1-day chart. Source: TradingView

In commentary last week, however, research firm Santiment not only confirmed the waning stock correlation but also said that this in itself was a sign that the crypto bull market was back.

Bitcoin mining difficulty, hash rate top previous peaks

For Bitcoin network fundamentals, there is no reason to pause for thought.

At its latest automated readjustment on Oct. 30, difficulty increased by 2.35% — hitting another all-time high.

Now at 62.46 trillion, difficulty reflects that competition among miners is more intense than ever — as Cointelegraph reported, it has never been so complex to mine a single BTC.

The hash rate tells an identical story, circling 493 exahashes per second (EH/s), according to the latest raw data estimates from statistics resource MiningPoolStats.

Commenting on the performance of both difficulty and hash rate, itself near record highs, James Van Straten, research and data analyst at crypto insights firm CryptoSlate, described the latter’s progress as a “surge.”

Jaran Mellerud, a mining analyst at crypto insights firm Arcane Research, predicted that the trend would continue.

“Bitcoin’s hashrate will likely continue surging due to the price pump coupled with the fact that miners are trying to outpace each other in upgrading fleets ahead of the halving,” he argued.

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

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

Greed matches BTC price all-time highs

Waiting in the wings and vying with RSI for upside potential is the classic crypto sentiment gauge, the Crypto Fear & Greed Index.

Related: First Bitcoin ETF trades $1.5B as GBTC ‘discount’ echoes $69K BTC price

Having lingered in a narrow range for months on end, Fear & Greed staged a firm return in line with Bitcoin’s push higher — but unlike BTC price action, it has returned to November 2021 levels.

The latest data shows the index hitting 72/100 in recent days. This is firmly within the “greed” category and matches its position just days after Bitcoin hit its most recent all-time highs of $69,000 nearly two years ago.

Fear & Greed tends to reach extreme levels before a significant trend change occurs in price action.

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