BTC ‘at least 6 months ahead’ – 5 things to watch in Bitcoin this week

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Bitcoin (BTC) is starting a fresh new week with its first attempt to crack $50,000 in over a month – what’s in store next?

After an encouraging weekend, BTC/USD faces an increasingly bullish macro climate and a host of game-changing expectations from analysts in October.

Q4, they say, should be different from anything we’ve seen so far in the current Bitcoin rally, and the latest estimates suggest there are more than six months left to prove it.

With “Uptober” set for its first full week, Cointelegraph takes a look at what could be next to move the market in the coming days.

Markets are preparing for a ‘Risk Journey’ in October

September stocks may have been flat, but the first few days of the new month have already shown how little good news can see Bitcoin outperform the macro package.

While the S&P 500 fell 5% in September, BTC/USD closed the month about $4,000 lower than where it closed in August.

However, since October 1, the pair’s fortunes have set a strongly different tone, and contrary to expectations that stocks will rise at the expense of the US dollar, the positive headwinds for Bitcoin may continue.

“The fourth quarter of 2021 is likely to post an above-average return,” CNBC quoted Sam Stovall, senior investment analyst at research firm CFRA, as saying over the weekend.

“However, investors will need to hold on tight during the typically turbulent journey in October, which saw 36% higher volatility compared to the average for the other 11 months.”

Sentiment last week was buoyed by the vote on the US Infrastructure Bill, which has now been pushed back until October 31 at the latest.

As it stands, the US dollar reached its highest levels in more than a year, according to the US Dollar Currency Index (DXY). A reversal in recent days – the bullish catalyst for bitcoin – is on traders’ radar.

For the popular Twitter trader Crypto Ed, the DXY correction could be past months instead of weeks.

DXY 1-day candle chart. Source: TradingView

$50,000, but not yet

After carving out $49,000 over the weekend, Bitcoin is clearly lined up to attack the all-important $50,000 mark – but not quite yet.

Despite the bullish impulses, the recent break to the upside on Sunday ended with a huge rejection and a subsequent drop of nearly $2,000.

Commentators have widely dismissed this as a bearish signal, however, asserting that any weakness in the BTC price will be temporary.

Among them is Cointelegraph contributor Michael van de Poppe, who on that day reiterated his latest theory about a short consolidation followed by a fresh bullish breakout.

Meanwhile, fellow trader Pentoshi likened the situation to activity in the fourth quarter of last year when it was $20,000, not $64,500, which Bitcoin needs to beat.

“I don’t really care about the lower time frames. I do care about the overall market structure” She said In accompanying Twitter comments.

Low or no decline, BTC/USD also set a strong weekly close of $48,234 – in doing so, completely canceling the action of the previous two weeks.

Trader and analyst Rekt Capital also pointed out that the moving average of Pi Cycle 111 is acting as support, which led to the recent rally.

The new hash rate ever flowing

You can’t know for sure, but according to some estimates, Bitcoin’s hash rate has already reached an all-time high.

Less than five months after China launched a mass exodus of miners and equipment due to regulatory crackdowns, data sources show that the underlying metric has fully compensated for the upheaval.

Not only that, but the hash rate has been as high as 200 Exahs per second (EH/s) in recent days – a full 32 EH/s higher than its previous peak.

Measuring the hash rate is tricky – it’s impossible to be sure of the exact mining power assigned to Bitcoin, so any depiction can be just guesswork.

While different sources vary widely – CoinWarz recorded 201 EH/s on October 2 while MiningPoolStats is currently showing 138 EH/s – the overall trend is not debatable.

The fundamentals of the Bitcoin network are stable at “only higher,” reflecting miners’ long-term conviction of profitability.

China expelled nearly 90% of the country’s bitcoin miners earlier this year. As a result, the hash rate has dropped by nearly 50%,” Anthony Pompliano, co-founder of Morgan Creek Digital hung on the data.

“After just a few months, we are almost back to an all-time high. Economic incentives lead to further decentralization of the network.”

A graph of the average hash rate of Bitcoin over a 7-day period. Source: Blockchain

As Cointelegraph reported last week, the difficulty is also set to defy records this week, with the next adjustment likely to be the seventh in a row.

This hasn’t happened since 2019, while the difficulty is still about 20% below its all-time high in May.

midway through?

It is no secret that the most famous Bitcoin analysts are claiming a stunning performance in the fourth quarter of BTC price action.

For PlanB, the creator of the stock-to-flow model family, the “worst case scenario” for Bitcoin has materialized two months in a row.

His ground estimates are now at $63,000 by the end of October, and a whopping $98,000 for the November close.

Still, getting smaller, the picture remains more rosy for Bitcoin bulls, he says. In his latest cross-asset stock-to-flow (S2FX) asset Update, PlanB has shown that the price behavior is close to 50% during its bullish cycle, leaving the door open for quick gains.

“IMO we’re halfway there, no sign of weakness (red) yet. Note that the color overlay is not months to half but a sign on the chain,” he commented on the chart.

“My guess: this second phase of the bull market will have at least another 6 months left.”

Bitcoin S2FX chart as of October 3rd. Source: PlanB / Twitter

Bitcoin has yet to catch up with the daily estimation of the streaming stock, as the spot price has deviated by record proportions in recent months.

On Monday, according to monitoring sources S2F MultiBTC/USD should be trading at just over $100,000.

Pricing in Bitcoin ETF

As Cointelegraph reported, chances are that a type of bitcoin exchange-traded fund (ETF) will get approval from US regulators this month.

Related Topics: Top 5 Cryptocurrencies to Watch This Week: BTC, LUNA, ATOM, XTZ, AXS

The signal to start a futures-based ETF is likely to come first, as the Securities and Exchange Commission (SEC) has “begin to decide on a conventional product until at least November.”

The market has been pricing in this historical moment for some time, but the decision could upend sentiment and with it the current state of Grayscale Bitcoin Trust (GTBC).

Despite price movements in recent weeks, the fund’s discount to the spot rate has remained significant, currently close to 14%.

The graph is marked in grayscale. Source: Bybt

Grayscale said it intends to transfer its major crypto funds to ETFs when conditions allow, while the data shows that the business is nothing but a struggle.

“GBTC absolutely dominates in volume versus its Bitcoin fund peers that trade 10 times more than anything else in dollar terms,” Eric Balchunas, an analyst at Bloomberg pointed last week.

“If it was an ETF, it would also be in the top 5% in terms of activity.”

Bitcoin trading volume comparison. Source: Eric Balchunas / Twitter