Bitcoin Set for a Breakout? 5 Key Highlights in Bitcoin This Week
As the cryptocurrency market enters a new week, Bitcoin is once again in the spotlight with its price attempting to reclaim the $69,000 mark. Investor sentiment is on edge as macroeconomic factors, such as the upcoming U.S. presidential election, continue to influence market movements. Despite recent gains, there’s a growing debate over whether BTC is poised for a breakout or facing further resistance. Meanwhile, leverage and open interest have reached record highs, raising concerns about potential volatility, while retail interest in Bitcoin remains subdued. Here are the 5 key things to watch in Bitcoin this week.
Bitcoin’s Impressive Weekly Close: Short-Term Scenarios to Consider
According to data, a last-minute surge ensured that BTC/USD had a weekly close to be proud of. The close saw Bitcoin at its highest level since early June, at slightly over $69,000. In response, traders thought about several short-term possibilities, such as a first decline and consolidation followed by a resurgence of upward momentum. Popular trader CrypNuevo identified local liquidity as the next obstacle to the price of Bitcoin in a post on X.
There is a major liquidation level and that’s to the upside, exactly at $69.3k. The liquidations at that level have increased over the weekend due to some traders opening shorts in this range. It would make sense to spike up to that $69.3k area first.
CrypNuevo
Bulls may experience some brief discomfort as a result of what comes next.
Crypto Markets Eye Jobless Data as Inflation Concerns Resurface
Jobless rates remain the most important event for traders of cryptocurrencies and risky assets after another quiet week for US macroeconomic data. The first round of unemployment claims is scheduled for October 24, one day after the Federal Reserve’s most recent economic outlook, known as the Beige Book. In recent weeks, stocks have led a risk-asset rise that has disregarded renewed inflationary warnings despite inflation remaining a hot topic of discussion.
Supercore inflation is now rebounding after materially falling in the first half of 2023. At the same time, core CPI inflation rose to 3.3% marking the first increase since March 2023. All while the Fed cut rates by 50 basis points in September. Did we really need a 50 bps rate cut?
The Kobeissi Letter
The US Presidential Election, which is now just two weeks away, and earnings season are both expected to influence market sentiment in the near future, according to Kobeissi.
BTC/USD Breaks Resistance: Are New All-Time Highs Coming?
A full seven months’ worth of Bitcoin price activity is now in focus due to recent developments. Up until now, BTC/USD has been trapped in a downward-sloping channel that has produced a series of lower highs and lower lows since reaching all-time highs in March.
This weekend, a candle on daily timeframes finally closed over channel resistance, and the weekly close confirmed the breakthrough signal, according to Cointelegraph. According to well-known trader and analyst Rekt Capital, at least $70,000 should be the next target. However, not everyone is in agreement that Bitcoin has permanently abandoned the channel. After the weekly close on October 21, veteran trader Peter Brandt remarked on a chart that was part of an X thread on Bitcoin, saying, “The 7-month inverted expanding triangle continues to form.”
AetherX Capital Warns of Potential Bitcoin Correction Amid Leverage Surge
While Bitcoin continues to rise to $69,000, some market watchers are already wary, with record levels of open interest. In a recent Quicktake blog post on October 19, the on-chain analytics platform CryptoQuant cautioned that the rate at which leverage was growing was concerning. The article made reference to a modified form of the Estimated Leverage Ratio (ELR) measure that takes stablecoin and Bitcoin reserves into account.
The Capriole Investments quantitative Bitcoin and digital asset fund’s Bitcoin Heater is another indicator that is raising red flags. Currently, the indicator is at its greatest levels since mid-2022. It measures relative heat in the Bitcoin Perpetuals, Futures, and Options weighted by Open Interest.
The heater is currently overheated and while it may remain like this for a while longer, it will eventually have to reset. The pullback or correction may start at current levels or higher. So caution is advised especially with leveraged positions.
Low Public Interest as Bitcoin Approaches $69K: Google Trends Data
Despite all of the excitement surrounding the comeback to $69,000, Bitcoin‘s popular participation is still noticeably low. Google Trends data highlights that, even if the price of Bitcoin is close to reaching new all-time highs, very few people outside of the cryptocurrency community are thrilled about it. The search phrase Bitcoin now has a score of 22, which is the lowest in a year and one of the lowest in the previous four years on a normalized scale of 0-100.
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