Bitcoin (BTC) sees a volatile start to a new week and month after its very first month-end closing above $ 60,000 – what’s next?
After a highly anticipated end to “Uptober”, the bulls are looking to November for the next phase of what they hope – and sometimes promise – a BTC price spike like no other will be.
The timing varies, as do the predictions. BTC / USD could expect a month-end closing of nearly $ 100,000 this month – but also a decline to nearly $ 50,000.
With all to play for and solid buyer support in the top $ 50,000 holdings, Cointelegraph is taking a look at what could affect Bitcoin price action in the coming week.
October 2021 will be the best month since 2020
Regardless of what comes next, market participants are in a celebratory mood this week as Bitcoin posts the highest monthly close in its history.
New all-time high month-end for Bitcoin
– Will Clemente (@WClementeIII) November 1, 2021
Not just $ 60,000, but $ 61,000 is now the target to beat for November.
Bitcoin is far from “just” for short periods of time, however, and Sunday’s closing price faced noticeable downward volatility post-factum – a trip to $ 59,500 – before another surprise surged above $ 62,000 hours later.
Fans of PlanB’s “worst-case scenario” price predictions, which demand at least 63,000 US dollars for the end of October, may be a little nervous.
While the series is still more or less on track, $ 98,000 must be on the table by the end of this month for the series to maintain its historical accuracy.
For PlanB itself, however, the results are more than satisfactory.
August $ 47,000
Sep $ 43K✅
Oct $ 61K New Monthly ATH Closing! ✅
Ok ok, 3% rounding error .. close enough for me
Next destinations: Nov> $ 98K, Dec> $ 135K pic.twitter.com/7LSnQBYJ33
– PlanB (@ $ 100 trillion) November 1, 2021
“Yes, Bitcoin could not close above $ 63,000 this month,” added Cointelegraph employee Michaël van de Poppe about the situation.
“However, his hit rate at $ 100 trillion on the stock-to-flow model is way better than your trading performance, so I wouldn’t really roast him at all. Bitcoin at $ 61,000 is just as good and close enough. “
After correcting from its overnight lows, BTC / USD is trading at around $ 62,000. With a return of almost 40%, October was the best month since December 2020.
Difficulty series eighth straight increase
Those looking for something that is truly “up only” mode need look no further than the basics of the Bitcoin network.
This week the difficulty level is being positively adjusted for the eighth time in a row – something that has not happened since 2018.
Given the increasingly competitive mining arena, the mining difficulty has almost made up for the losses it necessarily caused after China forced miners to shut down their tools in May.
The difficulty will rise to 21.89 trillion this week, a little over 3 trillion from the all-time high.
The hash rate – the measure of computing power devoted to mining – tells a similar story.
Although it is impossible to “measure” definitively, the hash rate is still tending to new all-time highs, estimates show.
Raw data tends to go up and down, and different estimates often result in significantly different readings. However, the weekly average hash rate is now around 159 exahashes per second (EH / s) – closer than ever to April’s 180 EH / s record.
Hodler hodl on
September was a golden opportunity for Bitcoin buyers to “buy the dip,” and October was not without brief setbacks either.
Did you buy the dip? If so, you’ve added to the growing cohort of long-term humbugglers whose beliefs only picked up in October.
As research from the major Kraken exchange found last week, the gains and surge to an all-time high of $ 67,100 did not entice Hodlers to sell BTC.
“While long-term owners were unimpressed by the retracement last month and used it as an opportunity to keep accumulating, that trend has not changed despite a significant price rebound to new all-time highs near $ 67,000,” the researchers concluded.
“In other words, the supply shock long-term owners bought last month just got worse this month.”
It is these companies, and not the short-term speculators, that will drive price action in the fourth quarter of this year, they added.
This coincides with an earlier analysis, particularly by analyst Willy Woo, which shows that the so-called “Hodler of Last Resort” or “Rick Astley” investors are still sticking to their investments. Miners themselves have also been among the long-term owners since 2020.
“Since 2020 the miners have been HODLers (and buyers) of BTC, this has been a fundamental change in behavior,” noted Woo this weekend.
“The miners have shown no sustainable accumulation behavior since the 2009-2014 era.”
Foreign exchange balances lowest since October 2018
When it comes to supply shock, the picture on the stock exchanges is bleak – from the point of view of a Bitcoin bear.
According to new data from on-chain analysis company Glassnode, the exchange’s BTC reserves are now at their lowest level in three years.
At that time, in late 2018, Bitcoin was headed for the pit of its previous bear market, which bottomed out at $ 3,100 in December.
Since then, price movement has changed an order of magnitude, but balances are still dwindling – everything indicates the magnitude of the potential shock should demand rise sharply from here.
The exchanges now control 2.47 million BTC. At its peak in April 2020, there were over 3.1 million BTC on their order books.
Changes in balance can vary significantly between exchanges. For example, in the past 24 hours, Coinbase Pro led the decline of nearly 20,000 BTC, while some other players saw their balance grow slightly.
Markets await announcement of a tightening by the Fed
The week ahead could see some well-known trends in traditional markets – and their traditional implications for crypto markets.
Related: Top Five Cryptocurrencies To Check Out This Week: BTC, ETH, BNB, MATIC, FTM
This could be thanks to new Fed comments on coronavirus management on Tuesday and Wednesday as markets anticipate further evidence of asset buying reductions.
This is because inflation is rising around the world, while Fed chairman Jerome Powell previously admitted that the accompanying narrative – the supply chain crisis – is likely to last “well into next year.”
“I think the Fed is doing pretty well to launch the taper pretty quickly. We expect them to announce it next week and then start doing it soon, so that’s pretty well set in stone, “said Kathy Jones, chief fixed income strategist at Charles Schwab, last week to Yahoo Finance.
“I think the big debate now is how quickly the Fed will actually hike rates. Market expectation has really shifted to expecting up to two rate hikes in 2022 and 2023 … that’s a pretty aggressive tightening pace. “
Such conditions serve to increase the attractiveness of Bitcoin as an inherently deflationary asset class with a mathematically verifiable upper supply limit.
Institutional inflows into existing Bitcoin investment products and the newly launched Futures Exchange Traded Funds (ETF) are evidence of growing demand.