Bitcoin (BTC) kicks off a new week after its first attempt to hit $ 50,000 in over a month – what’s next?
After an encouraging weekend, BTC / USD is facing a growing macro environment and a flurry of expectations from analysts calling for October to be a game changer.
They say the fourth quarter will be different than anything seen during the current Bitcoin bull run, and the latest estimates even suggest that there are more than six months left to prove it.
With the launch of “Uptober” in the first week, Cointelegraph will examine what factors could follow to change the market in the coming days.
Market prepares for “chaotic ride” this October
Stocks may have had a bad September, but the first few days of the new month suggest some good news that could see Bitcoin outperform the macro package.
While the S&P 500 was down 5% in September, BTC / USD closed the month around $ 4,000 lower than in August.
However, since October 1, the couple’s fate has certainly struck a different note, and compared to expectations for stocks to rise at the expense of the US dollar, the positive trends towards Bitcoin could also continue.
“The fourth quarter of 2021 is likely to generate above-average returns,” said Sam Stovall, chief investment strategist at research firm CFRA, over the weekend.
“In the often turbulent October period, which shows a 36% higher volatility compared to the average of the remaining 11 months, investors have to hold on.”
The mood was boosted last week by the vote on the US infrastructure law, which is currently being postponed until October 31 at the latest.
One of the reasons I am optimistic #BTC: DXY. diagram
2 days ago in the livestream: “DXY hits red box, will soon turn around and start correcting”
This correction can take some time and is bullish for the imo cryptocurrency. pic.twitter.com/bn5LI8B8Gk
– Crypto_Ed_NL (@Crypto_Ed_NL) October 1, 2021
It looks like the USD is at its highest level in more than a year as measured by the US Dollar Currency Index (DXY). A trend reversal in the past few days – traditionally a bullish catalyst for Bitcoin – is on traders’ radar.
A DXY correction is even possible for the popular Twitter retailer Crypto Ed Months before instead of weekly.
$ 50,000, but not yet
After Bitcoin cracked the $ 49,000 mark over the weekend, Bitcoin is clearly preparing for an attack on the all-important $ 50,000 mark – just not entirely.
Despite the bullish stimulus, the most recent breakout ended in strong rejection and a decline near the $ 2,000 mark on Sunday.
However, commentators have largely dismissed this as a bearish signal, claiming that any weakness in BTC price will be temporary.
Among them was Cointelegraph employee Michaël van de Poppe, who reiterated his latest theory of short-term consolidation followed by another bullish breakout.
– Michaël van de Poppe (@CryptoMichNL) October 4, 2021
Meanwhile, his trading colleague Pentoshi compared the situation to activity in the fourth quarter of last year when Bitcoin hit $ 20,000 instead of $ 64,500.
“I’m not really interested in off-peak times. I’m interested in the macro market structure, ”said Mr speak in the accompanying Twitter comments.
BTC / USD, falling or not falling, also placed on a solid weekly close of $ 48,234 – completely undoing its previous two-week promotions.
– Rekt Capital (@rektcapital) October 3, 2021
Trader and analyst Rekt Capital also noted stocks on the 111-day moving average of the Pi cycle provided support and fueled the recent rally.
New hash rate, always high dripping
You never know for sure, but according to some estimates, Bitcoin’s hash rate has hit an all-time high.
Less than five months after China triggered a mass exodus of miners and equipment due to regulatory action, data sources suggest that fundamentals fully offset the volatility.
Additionally, the hash rate could even hit 200 exahashes per second (EH / s) in the past few days – 32 EH / s higher than the previous high.
It is difficult to measure the hash rate – Bitcoin-specific mining power is impossible to determine and therefore any description can only be guesswork.
While various sources vary widely – CoinWarz recorded 201 EH / s on October 2, while MiningPoolStats is currently only showing 138 EH / s – the overall trend is unchanging.
Bitcoin network fundamentals are in “Just Up” mode, reflecting miners’ continued long-term confidence in profitability.
“China eliminated nearly 90% of the bitcoin miners in the country earlier this year. The result is a hash rate reduction of about 50%, ”said Anthony Pompliano, co-founder of Morgan Creek Digital commented on data.
“Just a few months later and we’re almost back to all-time highs. The economic incentives promote further network decentralization. “
As Cointelegraph reported last week, the difficulty will continue to challenge records this week, with the next correction likely to be the seventh straight rally.
This has not happened since 2019, while the difficulty is still around 20% below its all-time high from May.
On the half way?
It’s no secret that Bitcoin’s most popular analysts are calling for spectacular Q4 performance from BTC price action.
For PlanB, the creator of the stock-to-flow model family, the “worst-case scenario” for Bitcoin has come true after two months of operation.
His floor estimates are now $ 63,000 in late October and a whopping $ 98,000 in late November.
However, when zooming out, the picture is even brighter for bitcoin bulls, he said. In its latest stock-to-flow cross-assets (S2FX) To update, PlanB shows that the price action is close to 50% during its bull run, which offers an opportunity for a rapid advance.
“IMO we are right in the middle, no weaknesses yet (red). Note that the color overlay is not the month to halve, but an online signal, ”he commented on the graph.
“My prediction: This second stage of the bull market will be at least six months away.”
Bitcoin has yet to catch up with the daily estimates of the stocks, the spot prices have diverged by record rates in recent months.
For Monday, according to monitoring resources S2F multiple, BTC / USD is trading at just over $ 100,000.
Reviews in Bitcoin ETFs
As Cointelegraph reported, the chances are some type of Bitcoin Exchange Traded Fund (ETF) will get US regulatory approval this month.
Related: Top 5 Cryptocurrencies You Should See This Week: BTC, LUNA, ATOM, XTZ, AXS
A futures-based ETF should be in the works first, as the Securities and Exchange Commission (SEC) has “warmed up” to decide on a traditional product by at least November.
The market has been pricing in the key moment for a long time, but a decision could influence the mood and thus the current level of performance of the Grayscale Bitcoin Trust (GTBC).
Despite the price movements in recent weeks, the discount of the fund to spot prices remains considerable and is currently almost 14%.
Grayscale has announced that it will convert its flagship crypto funds into ETFs if circumstances permit, while data shows business is only suffering.
“GBTC is absolutely dominant in terms of volume over peer-to-peer Bitcoin funds, which in terms of dollars trade ten times more than anyone else,” said Bloomberg ETF analyst Eric Balchunas. Note last week.
“If it were an ETF, it would also be in the top 5% of the most active.”