Bitcoin (BTC) is in tip top shape – almost literally – with less than 15% of all-time highs moving into a new week.
A classic cocktail of factors laid the foundation for a Q4 final, which analysts are now confidently comparing with the Bull Runs of 2013 and 2017.
Decoupled from macro market movements and the US dollar, Bitcoin looks again like the gold alternative that investors want – while altcoins are slipping away.
With “Uptober” in its second full week, Cointelegraph is taking a look at what the BTC price action could expect in the coming days.
Altcoins are lagging behind the “Bitcoin season”
Things are looking bright for Bitcoin traders at the start of the week – last week’s four-month highs are back and beaten.
With the exception of a curious anomaly on the Bitstamp exchange, which saw a temporary decline to $ 51,000, a quiet weekend preserved previous gains.
Now, the BTC price action appears to be launching an assault on ultimate resistance below the all-time high of $ 64,500 and is delighting market participants.
Still stand behind this scenario on #Bitcoin. pic.twitter.com/Xw2GMZEKS2
– Michaël van de Poppe (@CryptoMichNL) October 11, 2021
However, there is another aspect behind Bitcoin’s strength – one that could continue to move higher in the short term.
Altcoins underperform, leading to predictions of a “Bitcoin season” before some form of the alt-season reappears later. As Cointelegraph reported, this might not be the case until 2022.
$ BTC dom vs #ALTSEASON
Alts are bleeding again as we speak, most have down 10-20% versus the BTC pair since this post
Every 1% = roughly 10% decrease from the BTC ratios
Volatile week in advance with ETF not conductive for high contaminated sites
Remember, Long Alts are equivalent to Short BTC Short Vol https://t.co/hWQulj6Qo7 pic.twitter.com/nv11k4IUHZ
– Pentoshi won’t condemn you. hates dms. DMs are scams (@ Pentosh1) October 10, 2021
The situation is particularly visible with Ether (ETH), the largest Altcoin in terms of market capitalization, which now has its lowest level compared to BTC since the beginning of August.
“ETH / BTC collapses while Bitcoin is consolidating,” summed up Cointelegraph employee Michaël van de Poppe late on Sunday.
“I assume that Bitcoin will continue while Altcoins have not yet got the game.”
Van de Poppe nonetheless added a controversial cycle price for ETH / USD of up to $ 20,000, with a timeframe of Q1 next year.
“You are here”
It takes a lot to please Bitcoiners when it comes to the BTC price action.
As any longtime Crypto Twitter resident will know, even the most unexpected moves in BTC / USD can only satisfy sentiment until investors demand more.
Last week was no exception – Bitcoin gained $ 3,000 in minutes, $ 5,000 in an hour, and hit a four-month high, but days later commentators complained of “boredom.”
The weight of the expectations for Bitcoin in 2021 – the year after the third halving and thus the deadline for halving the cycle price – is palpable.
How far the BTC price could go is a hot topic, and while some argue that $ 200,000 or even $ 300,000 is “programmed”, others are already losing confidence and claiming that this cycle cannot be like the last two.
However, comparing the years after the halving seems to offer an almost unanimous verdict on Bitcoin’s odds – the main surge to a blow-off top has yet to begin.
The drop below $ 40,000 in September, for example, is reminiscent of similar events in 2013 and 2017. These came just before take-off and acted as the “ultimate” bear trap.
You are here. #Bitcoin pic.twitter.com/syDyfsmlV1
– TechDev (@ TechDev_52) October 9, 2021
The superimposition of the price development from 2021 on that of 2017 also creates eerie similarities.
All of these results from the popular TechDev trading account suggest that this year’s high is an order of magnitude higher than the last. Technically or not, the analyst argues, a six-figure high is almost logically guaranteed.
The similarities are nothing new, however, as different sources depict the level of price conformity with previous years after halving throughout 2021.
One day it was billed for $ 31 billion
Much attention was focused on Bitcoin’s network fundamentals during the 2020-2021 Bull Run, but there is more.
With hash rate and difficulty nearly recovered and nearing all-time highs, new data shows that other aspects of Bitcoin are setting records of their own.
This week is all about network capacity and scaling – all in the chain before the Lightning Network is even considered.
As noted by analyst Kevin Rooke, Bitcoin processed over $ 30 billion in value in a single day last week.
“$ 31 billion. That’s how much value was billed on the Bitcoin blockchain in a single day this week, ”he commented.
“It’s a new all-time high for Bitcoin and a 40-fold increase in the settlement value since the beginning of 2020.”
The impressive transformation was accompanied by cost constancy – Bitcoin transaction fees remain low.
Questions about terms and conditions
The countdown to the decision on a Bitcoin Exchange Traded Fund (ETF) is still exciting this week – but is approval already “priced in”?
While the US regulator, the Securities and Exchange Commission, has postponed the deadline for deciding the fate of spot-based Bitcoin ETFs to November, there will be a “yes” or “no” for futures-backed ETF products this month .
The latter have drawn praise and criticism in equal measure, while the fate of existing institutional Bitcoin instruments, particularly the market heavyweight Grayscale Bitcoin Trust (GBTC), has also been questioned.
Against a rapidly rising Bitcoin price, GBTC continues to trade at a significant discount, and that trend has only intensified in recent weeks.
Should ETFs get the green light, analysts argue that more and more capital will pour into them long before Grayscale itself converts its funds into ETFs.
For macro analyst Lyn Alden, the chances that the so-called “grayscale premium” will even return to neutral territory seem slim.
“I doubt it, but it is not impossible that it will happen when there is a huge bitcoin rally and no ETF is available at the time,” she replied when asked on a social media discussion over the weekend.
Bitcoin’s performance outperformed the base case I wrote about it in 2020, in part due to the GBTC’s neutral arbitrage trading, which generated temporary additional demand.
Now it’s back on a more sustainable path imo, fueled by the accumulation of HODLers. Looks good, let’s see. https://t.co/RlPWBZYtNE pic.twitter.com/B99jQ1eIAt
– Lyn Alden (@LynAldenContact) October 9, 2021
Alden updated last year’s research highlighting GBTC’s role in Bitcoin’s price movement. The relative lack of the phenomenon now, she said, is inversely positive for the sustainability of BTC price developments.
For those concerned that the return to four month highs has been accompanied by market instability, think again.
Related: Top Five Cryptocurrencies To Check Out This Week: BTC, DOT, UNI, LINK, XMR
According to the sentiment meter of the Crypto Fear & Greed Index, the recent BTC price surge is firmly rooted in sustainable growth.
This is contrary to the norm – moves to highs and especially near all-time highs cause the index to hit extreme greed. This in turn indicates an unsustainable market that is easy to destabilize and trigger a price correction.
So far, Fear & Greed measures almost $ 57,000, but measures only 71/100 – “greed” instead of “extreme greed” and still far from the classic peak range of 95/100 and higher.
Still, October saw major shifts in sentiment. For example, on September 30th, just two weeks ago, the index measured 20/100 – “extreme fear”.