Bitcoin (BTC) begins the second week of October with a 4% rise since the beginning of the month, as geopolitical instability provides a quick focus on the market.
BTC price action continues to hold steady at $28,000, but what will happen next when markets react to the war in Israel?
In what could end up being a volatile period for risk assets, Bitcoin has yet to provide a notable reaction, spending the weekend in a narrow corridor.
However, that may change soon, as Wall Street’s open comes amid rising oil and gold prices, along with a stronger US dollar.
Macroeconomic stimuli are far from lacking, and the coming days are scheduled to see the release of the US Consumer Price Index in September. In the wake of last week’s surprising employment data, the reading carries added significance for the Federal Reserve.
Meanwhile, on-chain metrics point to interesting times for Bitcoin, with BTC/USD trading in a key range, which has formed a watershed since 2021.
Cointelegraph looks at these factors and more in our weekly list of potential upcoming Bitcoin price catalysts.
Bitcoin ‘illiquid and volatile’ as weekly close passes
The weekend saw market participants fully focused on the sudden outbreak of war in Israel, and with the markets reopening themselves, change is already afoot.
However, for Bitcoin, current events have not yet provided a concrete chain reaction, according to data released by Cointelegraph Markets Pro and TradingView Offers.
Bitcoin price action has been focused on $28,000 since Friday, and this level remains key as traders hope for a resistance/support reversal.
“There is nothing special happening this weekend,” Daan Crypto Trades Sum it up on X (formerly Twitter) until the weekly close.
“We expect trading volumes to pick up a bit soon but ultimately we should hover around this price area until futures open again tonight.”
Another post male Bitcoin has not decisively breached its 200-week moving average (MA), which stands at $28,176 at the time of writing.
Analyzing the 4-hour chart, popular trader Skew described BTC price behavior as “illiquid and volatile.”
– Δ skew (@52kskew) October 9, 2023
“The bullish flag for Bitcoin is still there – but it is taking a long time to show up,” fellow trader Gilly said I continuedZoom out to monthly performance.
“October is generally the bullish month of the year, so I still expect this month to take off.”
The war is back on the radar of cryptocurrency watchers
However, when it comes to price catalysts, the conflict in Israel has Bitcoin and cryptocurrency market participants anticipating that the bulk of volatility is yet to come.
With the memory of Bitcoin’s reaction to the war in Ukraine in February 2022 still in the background, Geely has been cautious about what might happen to BTC/USD next.
“All I know is that the Ukraine war led to an 8% candle decline, which was erased within a day,” part of X’s comment for the day to explain.
Meanwhile, Mike McGlone, chief macro strategist at Bloomberg Intelligence described Bitcoin is now showing a “risk off sentiment” among traders.
“My bias is that the sloping 100-week moving average will likely win the battle versus the 50-week uptrend. Rising crude oil is a liquidity squeeze,” he wrote on October 8.
At the time, the 100-week and 50-week moving averages were at $28,938 and $24,890, respectively.
McGlone touched on the unfolding macro asset phenomenon, with gold up 1% on the day and Brent up 3.25% before Wall Street opened.
“Markets reacted quite defensively,” Skew added, pointing to renewed strength in the US Dollar Index (DXY), which rose 0.4%.
Last week, the DXY index reached its highest levels since late 2022.
CPI leads ‘big week for inflation’
In the US, attention is focused on this week’s macroeconomic data, led by the September CPI report.
After jobs data last week showed that employment levels remained resilient despite anti-inflation moves by the Federal Reserve, bitcoin briefly fell on concerns that officials will make another interest rate hike, adding pressure on liquidity.
While the BTC/USD price has rebounded, these concerns remain.
“Good CPI data on Thursday could provide an opportunity to break out of this range, while a hot CPI will push us back to the lows of the range on the assumption that the Fed may have to hike rates by 25 basis points,” he said. Part of the weekend analysis from Shahir. Commenter CrypNuevo is reading.
According to According to data from CME Group’s FedWatch tool, markets are increasingly betting on interest rates remaining at current levels on decision day, scheduled for November 1.
In addition to the CPI, this week will see the release of the Producer Price Index (PPI), along with more unemployment claims and a total of 12 Fed speakers delivering comments. Minutes from the Fed’s previous interest rate decision on October 11 will also be revealed.
Main events this week:
1. Producer Price Index for September – Wednesday
2. Federal Reserve Meeting Minutes – Wednesday
3. Consumer Price Index Inflation for September – Thursday
4. OPEC monthly report – Thursday
5. Unemployment Claims Data – Thursday
6. Total of 12 Federal Speakers events
Huge week for inflation and the Fed.
– Al Qubaisi Letter (@KobeissiLetter) October 8, 2023
“A huge week for inflation and the Fed,” financial commentary source Al Qubaisi’s letter summarized in part of the X series.
“In addition, markets will react to geopolitical tensions from the end of this week. Volatility is the new normal.”
NVT signal rises to the highest level since 2018
Within Bitcoin, the Network Value to Transaction (NVT) signal drives the on-chain metric volatility packet to start the week.
NVT, which was created by Dmitty Kalichkin, Describe As Bitcoin’s “PE ratio”, it seeks to estimate the top and bottom of local BTC prices by comparing market cap to daily on-chain transaction values.
The latest data from on-chain analytics firm Glassnode shows that NVT has reached a five-year high – over 1,750 and far exceeding its position at the start of 2023.
NVT has undergone various reforms in recent years, as BTC supply dynamics require different guideline numbers to determine the highest prices.
“If the trend toward sidechains and private transactions continues, we can expect fewer and fewer transactions to be recorded in public on-chain data (reducing the relative value of the ‘T’ in NVT),” Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, wrote in part. From his own research in 2019.
“This may increase the NVT range of fair value over time.”
When analyzing NVT’s rise, cryptocurrency market intelligence platform IntoTheBlock noted that it represents a broader shift.
“The lens through which we view the value of Bitcoin is changing.” books in the weekend.
“Transaction value and volume were previously the go-to metrics. However, recent spikes in NVT ratios indicate that Bitcoin’s value now moves independently of transaction interest, indicating its growing role as a store of value.
Neither fear nor greed
Providing a quick insight into cryptocurrency market sentiment, the classic fear and greed indicator for cryptocurrencies reflects A general atmosphere of hesitation.
Related: Bitcoin Bull Market Waits as US Faces ‘Bear Slope’ – Arthur Hayes
The average investor is contrarian when it comes to the market, as evidenced by the index sticking strictly to the “neutral” zone.
As of October 9, Fear and Greed stood at 50/100 — exactly halfway along its scale between the two extreme emotions.
Zooming out, recent months have seen some of the most volatile conditions on record.
“You know the drill, I’m going to do a bulk buy when we get to Extreme Fear and $20,000 in Bitcoin,” said popular Crypto trader Tony. reaction For the latest data.
“It may take some time, but I feel Q1/Q2 2024 will be the ticket. If I see a change in behavior I will reevaluate.
Crypto Tony pointed out the idea that BTC/USD will return to $20,000 for a final retest before rallying higher after the support halving in 2024.
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.