Bitcoin (BTC) kickstarts the return of “Uptober” with its best weekly close in nearly five four months and a return to $69,000.
Week three of October is getting bulls excited about a retest of all-time highs, but an equally healthy consolidation could well come first.
Jobless claims and the Fed Beige Book headline the week’s macro data releases while risk assets shrug off United States inflation cues.
Opinions are diverging on whether BTC/USD has managed to ditch its seven-month downtrend for good.
Leverage is giving some analysts a headache as exuberance mounts in Bitcoin derivatives.
Mainstream consumer interest in Bitcoin is still nowhere to be seen.
Bitcoin bounces back with a swipe at $69,000
A last-minute push sealed a weekly close to be proud of for BTC/USD, data from Cointelegraph Markets Pro and TradingView confirms.
At just over $69,000, the close was Bitcoin’s highest since the start of June.
BTC/USD 1-hour chart. Source: TradingView
Reacting, traders considered various short-term scenarios, including an initial pullback and consolidation, before a return to upside momentum.
In a dedicated thread on X, popular trader CrypNuevo eyed nearby liquidity as the next BTC price hurdle to overcome.
“There is a major liquidation level and that's to the upside, exactly at $69.3k,” he noted.
“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.”
BTC liquidation heatmap. Source: CrypNuevo/X
What happens next could cause bulls some temporary pain. For CrypNuevo, the 50-period exponential moving average (EMA) on 4-hour timeframes, currently at $66,888, could see a retest.
“Ideally we can hold it, as well as holding the top part of the channel to confirm a breakout and a potential move higher,” he summarized.
BTC/USD 4-hour chart with 50EMA. Source: TradingView
Analyzing relative strength index (RSI) levels, fellow trader and analyst Daan Crypto Trades argued that Bitcoin needed to “lead” crypto markets into a sustained breakout.
“The key for the bulls is to keep the momentum going from here,” he reiterated in another of his latest X posts.
“$70K is a big level.”
BTC/USD 1-week chart. Source: Daan Crypto Trades/X
Macro triggers simmer ahead of US election
Another quiet week in terms of US macroeconomic data leaves unemployment numbers as the key event for crypto and risk-asset traders.
Initial jobless claims, due on Oct. 24, will come a day after the Federal Reserve’s latest update on economic conditions known as the “Beige Book.”
Inflation continues as a major topic of conversation, but in recent weeks, stocks have led a risk-asset rally which has ignored resurgent inflationary signals.
“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,” trading resource The Kobeissi Letter noted in its recent X analysis.
“All while the Fed cut rates by 50 basis points in September. Did we really need a 50 bps rate cut?”
Kobeissi referenced both earnings season and the US Presidential Election, now just two weeks away, as likely to shape market sentiment in the short term.
Fed target rate probabilities. Source: CME Group
The latest data from CME Group’s FedWatch Tool put the odds of a 0.25% interest rate cut at the Fed’s next dedicated meeting on Nov. 7 — a mere two days after the election — at more than 90% at the time of writing.
“Dollar is rising sharply in anticipation of this,” Matthew Dixon, CEO of crypto rating platform Evai, told X followers in part of a recent post on the topic.
“However, Crypto assets are shrugging off the risks and putting in a powerful rally ahead of the Nov 5th election. Remember, trend is your friend!”
Contention over BTC price breakout
Bitcoin’s recent moves have placed an entire seven months of BTC price action in focus.
Since hitting all-time highs in March, BTC/USD has been wedged within a downward-sloping channel, offering a succession of lower highs and lower lows — until now.
As Cointelegraph continues to report, daily timeframes finally saw a candle close above channel resistance this weekend, and the weekly close reinforced the breakout signal.
What should be next, popular trader and analyst Rekt Capital says, is “at least” $70,000.
BTC/USD 1-week chart. Source: Rekt Capital/X
Not everyone, however, agrees that Bitcoin has left the channel behind once and for all.
“7 month inverted expanding triangle continues to form,” veteran trader Peter Brandt commented on a chart which formed part of an X thread on Bitcoin published on Oct. 21, after the weekly close.
“The sequence of lower highs and lower lows from Mar 2024 has NOT yet been violated.”
BTC/USD 1-week chart. Source: Peter Brandt/X
Data from monitoring resource CoinGlass showing liquidity levels over the past six months confirms that the bulk of asks currently sits just above $70,000. Further resistance is visible near $72,000.
BTC liquidation heatmap (screenshot). Source: CoinGlass
Leverage raises eyebrows amid record open interest
As Bitcoin sees record levels of open interest accompanying its ascent to $69,000, some market observers are already cautious.
In one of its latest Quicktake blog posts on Oct. 19, onchain analytics platform CryptoQuant warned that leverage was increasing at a worrying rate.
“Leverage in the derivatives market has always been recognized as a key factor that, while helping traders achieve ideal profitability, also introduces significant potential risks. Many traders do not take this risk seriously when faced with market volatility,” contributor CrazzyBlockk warned.
The post referenced an altered version of the Estimated Leverage Ratio (ELR) metric, which includes both Bitcoin and stablecoin reserves.
“This is based on the concept that stablecoins have been increasingly used as collateral for derivative trading in recent years,” CrazzyBlockk explained.
“As a result, when looking at this metric, which has seen a sharp spike, it becomes clear that the Bitcoin derivatives market is now in a risk zone. This means the market is prone to any impulsive movements, whether bullish or bearish.”
Bitcoin ELR chart (screenshot). Source: CryptoQuant
Another metric flashing a warning is the Bitcoin Heater from quantitative Bitcoin and digital asset fund Capriole Investments.
The tool, which measures “relative heat in the Bitcoin Perpetuals, Futures and Options weighted by Open Interest,” is now at its highest levels since mid-2022.
“The heater is currently overheated and while it may remain like this for a while longer, it will eventually have to reset,” popular X analytics account AetherX Capital argued in response.
“The pullback or correction may start at current levels or higher. So caution is advised especially with leveraged positions.”
Bitcoin Heater. Source: Capriole Investments
Bitcoin retail interest stays absent
For all the buzz around the return to $69,000, Bitcoin’s mainstream engagement is still conspicuously lacking.
Google Trends data underscores that fact that despite being near new all-time highs, BTC price action is getting hardly anyone excited outside crypto circles.
On a normalized scale of 0-100, the search term “Bitcoin” currently scores 22, its lowest in a year and among the lowest values in the past four years.
Google search data for “Bitcoin” (screenshot). Source: Google Trends
Last week, popular X analytics account Bitcoindata2021 presented a bespoke interpretation of Bitcoin retail interest, which likewise showed macro lows.
“Wouldn't be surprised if a fast move to 90-100k is what gets their attention,” it wrote in a subsequent debate.
Bitcoin retail interest chart. Source: Bitcoindata21/X
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.
