Bitcoin kicked off the week towards $ 50,000 in its first attempt in over a month. What’s next?
After an encouraging weekend, BTC is facing an increasingly bullish macro environment and a flurry of expectations from analysts predicting October will be a game changer.
BTC price 4-hour chart | Source: Tradingview
They say the fourth quarter in the current Bitcoin bull run is different, and the latest estimates even put it in more than 6 months to prove it.
With “October bullish” in the first week, here are five factors that could change the market in the days ahead.
The market is preparing for the “journey” violent” in October
Stocks were mostly flat in September, but the first few days of the new month are bullish, suggesting that Bitcoin is outperforming other macroeconomic assets.
While the S&P 500 fell 5% in September, BTC ended the month around $ 4,000 below its August closing price.
However, since October 1, the couple’s luck has certainly struck a different note and compared to expectations of rising stocks when the US dollar falls, Bitcoin’s positive trends could continue as well.
“The fourth quarter of 2021 is expected to generate above-average profits. However, investors have to hold on during the turbulent October period, which was 36% more volatile than the 11-month average. ” quoted That’s what Sam Stovall, chief investment strategist at research firm CFRA, said over the weekend.
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 my reasons to be optimistic #BTC: DXY card
2 hours ago in the livestream: “DXY hits red box, should turn around soon and start a correction”
This correction could take a while and is bullish for crypto imo. pic.twitter.com/bn5LI8B8Gk
– Crypto_Ed_NL (@Crypto_Ed_NL) October 1, 2021
“One of the reasons I’m optimistic about BTC: DXY chart
2 days ago (Sep 28) in Live broadcast: “DXY touches the red box, will soon turn around and start correcting”.
OLDIt can take a while to make this adjustment and is bullish for cryptocurrencies. “
The US dollar is currently at its highest level in more than a year, as measured by the US dollar currency index (DXY). The reversal over the past few days has traditionally been a bullish catalyst for Bitcoin and should be watched closely by traders.
For famous traders Crypto Ed, a correction in DXY can take months, not weeks.
1-day DXY candlestick chart | Source: TradingView
Bitcoin still can’t come back 50000 dollars
After Bitcoin hit $ 49,000 over the weekend, Bitcoin is clearly preparing to attack the very important $ 50,000 mark, but it couldn’t.
Despite the bullish stimulus, the latest bullish break ended in a sharp rejection on Sunday, followed by a decline near the $ 2,000 mark.
Commentators don’t see this as a bearish signal, however. Any weakness in the BTC price is temporary.
Michaël van de Poppe reiterated his latest hypothesis of a short-term consolidation followed by another bullish breakout.
– Michaël van de Poppe (@CryptoMichNL) October 4, 2021
Meanwhile a dealer Pentoshi compared the current situation to the fourth quarter of 2020 when Bitcoin had to hit $ 20,000 instead of $ 64,500.
“I don’t really care about short timeframes. I’m interested in the macro-market structure. ”
In any case, BTC closed at $ 48,234 last week, completely wiping out the losses of the past two weeks.
– Rekt Capital (@rektcapital) October 1, 2021
“BTC has increased + 20% since the ascending triangle broke out.”
Trader and analyst Rekt Capital also noted that the Pi cycle’s 111-day moving average served as support for the recent rally.
Hashrate hit new ATH
Bitcoin’s hashrate has hit a new all-time high (ATH) by some estimates.
Less than five months after China sparked the mass miners’ exodus, data sources suggest that this fundamental indicator has regained its full pre-regulatory crackdown.
Additionally, the hashrate can even hit 200 exahashes per second (EH / s) in the past few days – 32 EH / s higher than the previous high.
Measuring hashrate is not an easy task and it is not possible to accurately calculate Bitcoin-specific mining power. Any description can only be guesswork.
Although different sources give different numbers, such as CoinWarz recorded 201 EH / s on October 2, while MiningPoolStats showed 138 EH / s, which is undisputed in terms of the overall trend.
Bitcoin network fundamentals are in “Just Up” mode and reflect miners’ long-term beliefs about profitability.
“China eliminated nearly 90% of the bitcoin miners in the country earlier this year. This reduced the hashrate by about 50%. Just a few months later, the hashrate has almost returned to its all-time highs. Economic incentives are driving the decentralization of the networks ”, co-founder of Morgan Creek Digital, Anthony Pompliano comment based on data.
Bitcoin 7 Day Average Hashrate Chart | Source: Blockchain.com
Additionally, the difficulty level will also challenge the records for the week, with the next adjustment likely to be a seventh step in a row.
This has not happened since 2019, while the level of difficulty is currently still around 20% lower than ATH in May.
Another 6 months to grow
The most popular analysts predict that the top cryptocurrency will perform spectacularly in the fourth quarter.
For PlanB, the creator of the stock-to-flow model, the “worst-case scenario” for Bitcoin will come true in two months.
Its low estimate was $ 63,000 in late October and a whopping $ 98,000 in late November.
However, when zooming out on the chart, the picture is even brighter for Bitcoin bulls. In Update In the latest stock-to-flow cross-asset (S2FX), PlanB has shown price action of around 50% during the bull cycle, which offers an opportunity for a rapid advance.
“Bitcoin is in the middle of the road and showing no signs of weakness (red). Note that the colors are not the number of months to halve, but rather a signal in the chain, with red on top and blue on bottom. My prediction: This second stage of the bull market will be at least 6 months away. ”
S2FX Bitcoin chart as of October 3rd | Source: PlanB
Bitcoin has yet to catch up with the daily stock-to-flow estimates, while spot prices have deviated record rates in recent months.
On Monday, according to the surveillance source S2F multiple, BTC must trade at more than $ 100,000.
Bitcoin ETF valuation
Several types of Bitcoin exchange-traded funds (ETFs) are likely to receive US regulatory approval this month.
Futures-based ETFs are expected to be launched first, as the Securities and Exchange Commission has “postponed” a decision on a traditional product until at least November.
The market has been pricing in this milestone for some time, but the 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 fund’s discount to spot prices remains large and is currently almost 14%.
Spread chart of Grayscale | Source: Bybt
Grayscale has announced plans to convert top crypto funds into ETFs if circumstances permit, while data shows that business continues to decline.
“GBTC is absolutely dominant over peer-to-peer Bitcoin funds in terms of volume and trades 10x more than any other in dollars. If it were an ETF, it would also be in the top 5 percent, ”said Bloomberg ETF analyst Eric Balchunas. Note last week.
Compare the transaction volume of NS Bitcoin Fund | Source: Eric Balchunas
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According to Cointelegraph