Bitcoin started the second week of October on a solid note, gaining 4% to date. This resilience comes amid escalating geopolitical tensions that have shifted the market’s focus to safe-haven assets. As of now, BTC’s price movement is pegged at the $28,000 level and market participants are wondering about the cryptocurrency’s next move in the face of developing events, especially the conflict in Israel.
CPI and PPI data are awaited for Bitcoin
Bitcoin maintained a tight trading range throughout the weekend, showing little reaction to external factors. But that could soon change as Wall Street opens its doors amid rising oil and gold prices as well as a strengthening US dollar. Additionally, upcoming macroeconomic events such as the release of September’s US Consumer Price Index (CPI) are of great importance to Bitcoin, especially after last week’s surprising employment data. These factors pave the way for a potentially volatile period for BTC.
Uncertainty continues in Bitcoin price
Over the weekend, Bitcoin investors kept a close eye on the sudden outbreak of conflict in Israel, but the cryptocurrency’s response remained relatively muted, with BTC’s price hovering around $28,000. Market experts are carefully observing Bitcoin’s interaction with its 200-week moving average, which currently stands at $28,176. While the cryptocurrency maintains its bullish flag formation, some traders describe its recent price behavior as “not liquid but choppy.”
$BTC 4H
these wicks really say how illiquid & choppy price action is pic.twitter.com/Qq13GsuqfB— Skew Δ (@52kskew) October 9, 2023
The ongoing conflict in Israel has put Bitcoin and the broader crypto market on edge, reminiscent of Bitcoin’s response to the war in Ukraine in 2022. As tensions rise, analysts remain cautious about the potential impact on BTC’s price. Mike McGlone, senior macro strategist at Bloomberg Intelligence, suggests that Bitcoin is currently exhibiting a “risk-off bias” influenced by factors such as rising crude oil prices and the strength of the US Dollar Index. In addition, the September CPI report to be announced in the USA may change the course of Bitcoin depending on the outcome of the inflation data.
Because in the USA, attention is focused on the week’s macroeconomic data pressures, led by the September CPI report. After employment data released last week showed that employment levels remained resilient despite the Fed’s anti-inflation moves, Bitcoin briefly declined due to fears that authorities would raise interest rates further and further suppress liquidity. “A good CPI data on Thursday could provide a chance to break out of this range, while a hot CPI would push us back to the lows of the range, suggesting the FED could be forced to raise 25 points,” popular commentator CrypNuevo wrote in part of his weekend analysis.
Markets are increasingly betting that interest rates will remain at current levels on decision day, set for Nov. 1, according to data from CME Group’s FedWatch tool. This week, in addition to the CPI, the Producer Price Index (PPI) will be announced, unemployment applications will increase and a total of 12 Fed speakers will make comments. Fed meeting minutes regarding the previous interest rate decision will also be announced on October 11.
On-chain metrics and NVT signal
Beneath the surface, on-chain metrics provide intriguing insights into the future of Bitcoin. The network value per transaction (NVT) signal, often compared to a “PE ratio” for Bitcoin, rose above 1,750 to levels not seen in five years. This change shows that the dynamics in BTC supply are changing and Bitcoin’s role as a store of value is increasing. Analysts also point out that Bitcoin’s value is moving independently of transactional utility, marking a notable transformation in the perception of the cryptocurrency.
Fear and Greed index is neutral
The Crypto Fear & Greed Index reflects a mood of indecision among investors, maintaining a neutral stance at 50/100. This sentiment suggests a certain level of indecision in the market, with investors closely monitoring conditions for potential buying opportunities and possibly considering a retest of the 20,000 BTC level in the coming months. While Bitcoin remains steady at $28,000, the crypto community awaits key events in the coming weeks, including macroeconomic data releases and geopolitical tensions, that could shape the cryptocurrency’s journey.
Popular trader Crypto Tony reacted to the latest data. “You know what I will do. When there is extreme Fear and Bitcoin drops to $20,000 I will bulk buy. It may take a while but I feel Q1/Q2 2024 will be the ticket. “If I see a change in behavior, I will re-evaluate,” he added. Crypto Tony referenced a hint that BTC/USD will return to $20,000 for one last retest before expanding further after the 2024 halving.
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