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BTC price nears 2023 highs — 5 things to know in Bitcoin this week

Bitcoin (BTC) is off to a strong start in the last week of October as cryptocurrency markets rise 3% in value. This could be the start of a classic “Uptober” for Bitcoin and altcoins, with BTC/USD sitting close to its all-time high. Will the bulls be able to break through the resistance?

Traders and market watchers will be eagerly awaiting the opening of Wall Street today, as Asia sets the tone for the crypto comeback. However, given the strength of the resistance, traders are being more cautious with their BTC price predictions. It is unlikely that the climb to $32,000 will be easy or quick.

The Federal Reserve’s interest rate decision on Nov. 1 will be of particular importance, as Bitcoin must also navigate the macroeconomic data prints and any potential geopolitical events. This could be a wild week for crypto and risk assets as Bitcoin bulls attempt to break out of a multi-month trading range.

RSI gives Bitcoin traders cold feet over rally

As Cointelegraph reported, these three-month highs are being treated with suspicion by some traders, who see breaking through $32,000 as a difficult challenge.

“Well on it’s way towards the top of the 2023 range,” popular trader Daan Crypto Trades summarized on X (formerly Twitter) on the day.

With hours to go until the Wall Street open, BTC/USD is now retreating from the highs, on the way back toward the $30,000 mark.

Analyzing the odds of a deeper drawdown, popular trader Ali drew attention to the difference between web 1.0 2.0 3.0 and 4.0, difference between web 3.0 and web 2.0, difference between web 2.0 and web 3.0, difference between web 1.0 web 2.0 and web 3.0, difference between web 3.0 and metaverse, difference between web 1.0 2.0 3.0, difference between web 3.0 and 2.0, difference between web 2.0 and 3.0, difference between metaverse and web 3.0, and characteristics of web 3.0 relative strength index (RSI) readings.

“An impending price correction appears to be on the horizon unless BTC manages to clock a daily candlestick close above $31,560,” part of his comments warned.

At 77 on Oct. 23, RSI was already at levels that Ali noted had triggered “sharp corrections” since March this year. As a rule, anything above 70 is considered “overbought.“

Others were freely optimistic, including Philip Swift, co-founder of the trading suite DecenTrader and creator of the statistics resource Look Into Bitcoin.

Popular trader CredibleCrypto meanwhile described a Bitcoin breakout as “almost there.” Updating an idea from late August, he suggested that $30,000 was the key level to break for a trend change.

Bitcoin saw a strong start to the last week of “Uptober” with a trip to nearly $31,000, data from Cointelegraph Markets Pro and TradingView shows.

PCE and GDP due in run-up to FOMC

The Personal Consumption Expenditures (PCE) Index is the focus of the U.S. macro diary this week, and the timing is significant. The Federal Open Market Committee (FOMC) will meet to decide on interest rate policy on Nov. 1, and as one of the Fed’s favored inflation gauges, PCE is being carefully monitored by markets. The gross domestic product (GDP) figure for the third quarter is also due.

Although recent data prints have consistently been higher than expected, indicating stubborn inflation, the chances of further rate hikes are minimal. According to CME Group’s FedWatch Tool, there is even a 1.6% probability of a rate cut by the FOMC next week.

The Kobeissi Letter said in a commentary on the week’s macro diary, “Meanwhile, earnings season is in full swing, and Fed speculation continues. Volatility is great for traders.”

Skew and others are also watching U.S. dollar strength, with the U.S. Dollar Index (DXY) cooling the strong uptrend that started in mid-July.

Skew commented, “Looking for trend continuation or clear break of 1D trend some time this week or into November.” They added that a “major move” should come soon.

Exchange balances show “clear trend”

The trend of decreasing BTC holdings on exchanges has been widely reported as they reach levels not seen since 2018.

CryptoQuant’s latest data shows that the major trading platforms now have a combined BTC balance of 2.024 million BTC.

The FTX crash in November 2022 accelerated the rate of balance reduction, and despite the BTC price recovery this year, the trend has yet to reverse.

Now, exchange deposits are at year-to-date lows, according to James Straten, research and data analyst at crypto insights firm CryptoSlate.

“Since Bitcoin’s inception, deposits have always outpaced withdrawals. However, due to the FTX collapse in Nov ’22 and the SVB crisis in Mar ’23, the trend flipped for the first time,” as per an X post over the weekend.

The accompanying chart revealed that exchanges account for 36% of all BTC transactions.

Bitcoin “newbies” absent this month

Analysis from CryptoQuant suggests that, while the BTC price action is positive, it is exhibiting “artificial” characteristics.

SignalQuant, in one of their Quicktake market updates on Oct. 22, reported that there have been few new market entrants in the past month.

They used the Sum Coin Age Distribution metric, which is a way of differentiating between newer and older unspent transaction output (UTXO) data.

SignalQuant noted that when the indicator spikes, it usually indicates a turning point for BTC’s price in the long term.

The researcher concluded that, while no single indicator can explain market behavior, the coin sum data is “too significant to ignore”.

Cointelegraph previously reported that long-term holders now control more of the BTC supply than ever before.

Market fear absent in a “scary area” for Bitcoin

After an extended period of scarcely any fluctuation, the Crypto Fear & Greed Index is starting to show indications of volatility.

Over the weekend, the classic crypto sentiment gauge jumped into “greed” region, reaching 63/100 — its highest rating since July 12.

The increase coincided with Bitcoin’s attempts to break through $30,000 over the weekend, emphasizing the significance of that price level in traders’ minds.

On that topic, popular trader Altcoin Sherpa depicted $30,000 as a “scary area.”

“I still see this next high as incredibly important when looking at where price goes,” he told X subscribers on the day, adding that “we’re about to see if we’re going to see 20k or 40k in the midterm.”

Like others, Altcoin Sherpa highlighted $32,000 as the ultimate line in the sand for bulls to break through.

“Basically if we breach 32k strongly, we go to 40k,” he continued.

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