Bitcoin (BTC) price is oscillating within an ascending channel, bounded by resistance at $28,000 and rising support at around $26,750.
Bitcoin’s flat price movement has been accompanied by lower volumes and volatility, underscoring the growing bias conflict among traders.
Bitcoin network activity decreased
The duration of Bitcoin consolidation coincides with a massive decline in deposits, withdrawals and the number of total transactions. Notably, all of these metrics increased in May due to the hype related to Bitcoin Ordinals, but they collapsed significantly in September.
“This indicates that Bitcoin network activity has decreased.” Argues MAC_D, on-chain data analyst at CryptoQuant, added:
“This occurred because there were fewer new investments coming into the cryptocurrency market, resulting in lower liquidity and thus less price volatility.”
Bitcoin ETF hopes against concerns about rising interest rates
Bitcoin’s period of consolidation is emerging in the wake of two conflicting market catalysts: hopes for approval of a Bitcoin ETF in the US versus concerns about the Federal Reserve’s “higher for longer” interest rate strategy.
Analysts argue that approval of a Bitcoin exchange-traded fund will bring $600 billion in demand to the market – a boon for Bitcoin’s price. On the other hand, more stable inflation increases the Fed’s ability to keep interest rates higher in the future, which could in turn hurt riskier assets, including Bitcoin.
S&P 500, Gold, Bitcoin and EURUSD after CPI print: pic.twitter.com/AO4FWHpv0Z
— TradingView (@tradingview) October 13, 2022
A former BlackRock manager confirms that the US Securities and Exchange Commission will approve a Bitcoin ETF by the end of the first quarter of 2024.
BTC accumulation continues
The supply of Bitcoin across whale and institutional addresses increased as we entered October, suggesting that the cryptocurrency’s wealthiest investors were accumulating outside the market via over-the-counter desks.
For example, the supply held by Bitcoin addresses with a balance of between 10,000 and 100,000 BTC (teal wave) jumped more than 1% from its low on October 5.
The jump appears when the pool absorbs declines in the supply held by Bitcoin addresses with a balance of between 1,000 and 10,000 BTC (orange wave). On the other hand, the supply held by a group of BTC balance increased between 100 to 1000 (green wave).
Bitcoin technical analysis shows 40% decline
From a technical perspective, Bitcoin is looking to rise towards $28,000 after showing signs of stabilization around $26,750. The short-term bullish outlook is entirely based on Bitcoin price fluctuations within the prevailing ascending triangle, as shown below.
The longer time frame scenario shows that Bitcoin is moving within a broader ascending channel pattern. Therefore, a bounce from the current support area (red bar) could see Bitcoin price rise towards $36,000 in late 2023 or early 2024.
However, the ascending channel looks like a rising wedge pattern, which is a bearish reversal pattern. The rising wedge is resolved after the price breaks below the lower trend line and declines by the maximum height of the pattern.
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Therefore, if Bitcoin falls below the channel’s lower trend line, the Bitcoin price could fall by up to 40% to $15,650 in 2023 or in the first quarter of 2024.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.