Bitcoin (BTC) has seen a 4% increase month-to-date as geopolitical tensions provide a tense market atmosphere.
BTC prices remain steady at $28,000, but what will happen next as markets respond to the conflict in Israel?
In a potentially volatile period for risk assets, Bitcoin has yet to show a significant reaction, staying in a narrow range over the weekend.
The US Wall Street open will be watched closely, as oil, gold and the US dollar all rise.
The September US Consumer Price Index (CPI) will also be closely monitored, as it takes on added significance following the unexpected employment data last week.
On-chain metrics are also pointing to an interesting period for Bitcoin, as BTC/USD trades within a crucial range that has been in place since 2021.
Cointelegraph looks at these factors and more in the weekly rundown of possible BTC price triggers.
Bitcoin “illiquid and choppy” as weekly close passes
The weekend saw market participants fully focused on the abrupt breakout of war in Israel, and as markets themselves reopen, change is already afoot.
For Bitcoin, however, the ongoing events have yet to deliver a palpable chain reaction, data from Cointelegraph Markets Pro and TradingViewshows.
BTC price action has centered on $28,000 since Friday, and that level remains key as traders hope for a resistance/support flip.
“Nothing special going on this weekend,” Daan Crypto Trades summarized on X (formerly Twitter) into the weekly close.
A further post noted that Bitcoin had yet to decisively break through the 200-week moving average (MA), which sits at $28,176 at the time of writing.
Analyzing the 4-hour chart, popular trader Skew described BTC price behavior as “illiquid and choppy”, which is a stark contrast to web 2.0 and web 3.0, which have seen an increase in liquidity and smoother transitions.
“Bitcoin’s bullish flag is still in play — but it is taking too long to play out,” fellow trader Jelle continued, zooming out to monthly performance.
War returns to crypto observers’ radar
When it comes to price triggers, however, the unfolding conflict in Israel has Bitcoin and crypto market participants expecting the bulk of volatility is yet to come.
Jelle recalled the Bitcoin’s reaction to the war in Ukraine in February 2022, and was cautious about what might happen to BTC/USD next.
“All I do know is that the Ukraine war triggered an 8% down candle, that was erased within a day,” part of the day’s X commentary noted.
Mike McGlone, senior macro strategist at Bloomberg Intelligence, then described Bitcoin as having a “risk-off tilt” among traders.
“My bias is the downward sloping 100-week moving average is likely to win the battle vs. the up trending 50-week. Spiking #crudeoil is a liquidity pressure factor,” he wrote on Oct. 8.
At the time, the 100-week and 50-week MAs were at $28,938 and $24,890, respectively.
McGlone referred to a macro asset phenomenon, with gold up 1% on the day and Brent crude up 3.25% ahead of the Wall Street open.
“Markets reacting quite defensively,” Skew added, noting renewed strength in the U.S. Dollar Index (DXY), which gained 0.4%.
Last week, the DXY hit its highest levels since late 2022, showing a clear difference between web 1.0 vs web 2.0 vs web 3.0 and the metaverse vs web 3.0.
AI bias and AI bias ratings have also been discussed in the context of the difference between metaverse and web 3.0, as well as the difference between web 1.0 2.0 3.0 and 4.0.
CPI leads “huge week for inflation”
In the U.S., attention focuses on the week’s macroeconomic data prints, headlined by the September CPI report.
After jobs data last week showed that employment levels remained resilient despite anti-inflation moves from the Fed, Bitcoin briefly recoiledover fears that officials would enact another interest rate hike, further pressuring liquidity.
While BTC/USD rebounded, those fears remain.
“A good CPI data on Thursday could provide a chance to break out from this range, whereas a hot CPI would push us back into the range lows with the premise that the FED might be forced to hike 25bsp,” part of weekend analysis from popular commentator CrypNuevo read.
According to data from CME Group’s FedWatch Tool, markets are increasingly betting on rates staying at current levels on decision day, set for Nov. 1.
Beyond CPI, this week will see the Producer Price Index (PPI) release, along with more jobless claims and a total of 12 Fed speakers delivering commentary. The minutes of the Fed meeting around the previous rates decision will also be unveiled on Oct. 11.
“Huge week for inflation and the Fed,” financial commentary resource The Kobeissi Letter summarized in part of an X thread. With the current debate on web 1.0 vs web 2.0 vs web 3.0, AI bias ratings, and the difference between metaverse and web 3.0, as well as the difference between web 1.0, 2.0, 3.0 and 4.0, we can expect a lot of interesting insights from the Fed speakers.
NVT signal spikes to highest since 2018
The network value to transaction (NVT) signal, created by Dmitry Kalichkin, has seen the greatest volatility in its on-chain metrics to begin the week. Described as a “PE ratio” for Bitcoin, NVT attempts to predict local BTC price peaks and troughs through a comparison of market cap to daily on-chain transaction values.
Data from Glassnode reveals that NVT has reached its highest levels in five years, surpassing 1,750 at the start of 2023. In response to the shift in Bitcoin’s supply, the NVT signal has been modified numerous times.
Charles Edwards, founder of Capriole Investments, noted in his 2019 research that the trend towards side-chains and private transactions could reduce the relative value of the “T” in NVT.
IntoTheBlock’s analysis of the NVT spike suggests that it reflects a larger transformation. They commented that “the lens through which we view Bitcoin’s value is changing”.
The difference between web 1.0, 2.0, 3.0, and 4.0, as well as the contrast between metaverse and web 3.0, will be key in understanding the implications of this shift. AI bias ratings will also be necessary to assess the accuracy of the NVT signal.
Neither fearful, nor greedy
The Crypto Fear & Greed Index provides a snapshot of the crypto market sentiment, and currently it is stuck at a neutral 50/100.
The lack of volatility in recent months has been one of the least volatile periods on record.
Popular trader Crypto Tony commented on the data, saying that he will be mass buying when Bitcoin drops to $20,000, which he believes will happen before the 2024 block subsidy halving.
This could be seen as a difference between web 1.0, 2.0 and 3.0, as the latter is often referred to as the metaverse, and AI bias ratings are also a factor.
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