BTC bull run has ‘at least 6 months to go’ – 5 things to watch out for in Bitcoin this week

by



[ad_1]

Bitcoin (BTC) begins a new week after its first attempt to crack $ 50,000 in over a month – what lies ahead?

After an encouraging weekend, BTC / USD faces an increasingly bullish macro climate and a host of analyst expectations demanding that October be a game-changer.

The fourth quarter, they say, is expected to be unlike anything seen in Bitcoin’s current bull run, and the latest estimates even claim that there are more than six months to prove it.

With “Uptober” scheduled for its first full week, Cointelegraph examines the next factors that could move the market in the coming days.

The markets are preparing for a “tumultuous ride” in October

Stocks may have had a flat September, but the first days of the new month have already shown just how little good news can see Bitcoin outperforming the macro pack.

While the S&P 500 fell 5% in September, BTC / USD closed the month around $ 4,000 below its August level.

Since October 1, however, the pair’s fortunes have firmly set a different tone, and against expectations of a rally in stocks at the expense of the US dollar, the positive headwinds for Bitcoin may well continue.

“The fourth quarter of 2021 is likely to see an above-average return,” CNBC said, quoting Sam Stovall, chief investment strategist at research firm CFRA, on the weekend.

“However, investors will need to hang on during the generally tumultuous October run, which saw volatility 36% higher than the other 11-month average.”

The sentiment last week was driven by the vote on the U.S. infrastructure bill, which is now pushed back until October 31 at the latest.

Currently, the USD is at its highest level for over a year, as measured by the US Dollar Currency Index (DXY). A reversal of recent days – traditionally a bullish catalyst for Bitcoin – is on traders’ radar.

For popular Twitter trader Crypto Ed, a DXY correction could even last months rather than weeks.

1-day DXY candle chart. Source: TradingView

$ 50,000, but not yet

After cutting $ 49,000 over the weekend, Bitcoin is clearly preparing an attack on the all-important $ 50,000 bar – but not quite yet.

Despite some bullish impulses, Sunday’s last bullish breakout ended with a massive rejection and subsequent drop to nearly $ 2,000.

Commentators largely dismissed this as a bearish signal, however, saying any weakness in BTC prices will be temporary.

Among them is Cointelegraph contributor Michaël van de Poppe, who repeated his recent theory that day of a brief consolidation followed by another breakout to the upside.

Trader Pentoshi compared the situation to activity in the fourth quarter of last year, when Bitcoin was expected to beat $ 20,000, not $ 64,500.

“I don’t really care about tight deadlines. I care about the structure of the macro market, ”he said. noted accompanying Twitter comments.

Falling or no falling, BTC / USD also achieved a strong weekly close of $ 48,234 – and in doing so, completely canceled the action of its previous two weeks.

Trader and analyst Rekt Capital also noted the Pi cycle’s 111-day moving average as support, fueling the recent rally.

New all-time hash rate highs pile up

You can never know for sure, but by some estimates the Bitcoin hash rate has already reached new all-time highs.

Less than five months after China triggered a massive migration of miners and equipment due to a regulatory crackdown, data sources show that the fundamental metric has fully offset the upheaval.

Not only that, but the hash rate may have even hit 200 exahashs per second (EH / s) in recent days, 32 EH / s above its previous peak.

Measuring the hash rate is difficult – the mining power dedicated to Bitcoin is impossible to determine exactly, and therefore any representation can only be a guess.

While the different sources vary widely – CoinWarz registered 201 EH / s on October 2 while MiningPoolStats currently only shows 138 EH / s – the overall trend is indisputable.

The fundamentals of the Bitcoin network are firmly in “up only” mode, reflecting miners’ continued long-term belief in profitability.

“China kicked out nearly 90% of the country’s bitcoin miners earlier this year. As a result, the hash rate dropped by about 50%, ”said Anthony Pompliano, co-founder of Morgan Creek Digital. commented on the data.

“Only a few months later and we’re almost back to an all time high. Economic incentives stimulate the decentralization of the network.

Bitcoin 7-day average hash rate graph. Source: Blockchain

As Cointelegraph reported last week, the difficulty is also set to defy records this week, with the next adjustment likely being the seventh consecutive increase.

That hasn’t happened since 2019, when the difficulty remains around 20% lower than its all-time highs in May.

Halfway through?

It’s no secret that best-known Bitcoin analysts are calling for a spectacular fourth quarter performance in BTC price action.

For PlanB, creator of the stock-to-flow family of models, the “worst-case scenario” for Bitcoin came about for two consecutive months.

Its floor estimates now stand at $ 63,000 by the end of October and $ 98,000 for the November close.

Zooming out, however, the picture remains even rosier for Bitcoin bulls, he says. In its latest stock-to-flow cross-asset (S2FX) update, PlanB has shown price behavior to be around 50% throughout its bull cycle, leaving the door open for quick gains.

“IMO, we’re halfway there, no signs of weakening (red) yet. Note that the color overlay is not months to halve, but a chain signal,” he said. commented on the graph.

“I guess: this 2nd stage of the bull market will have at least 6 more months to go.”

Bitcoin S2FX chart as of October 3. Source: PlanB / Twitter

Bitcoin has yet to catch up with daily stock-to-flow estimates, as the spot price has deviated in record proportions in recent months.

For Monday, according to the monitoring resource S2F Multiple, BTC / USD is expected to trade at just over $ 100,000.

Pricing in a Bitcoin ETF

As Cointelegraph reported, there’s a good chance that some sort of Bitcoin exchange-traded fund (ETF) will gain U.S. regulatory approval this month.

Related: Top 5 Cryptocurrencies To Watch This Week: BTC, LUNA, ATOM, XTZ, AXS

Futures-based ETF-based green light likely first, as Securities and Exchange Commission (SEC) “kicked the box” over traditional commodity decision through November at least.

The market has been pricing the historic moment for some time, but a move could nonetheless upend sentiment and with it the current state of affairs in the Grayscale Bitcoin Trust (GTBC).

Despite the price action in recent weeks, the fund’s discount to the spot price has remained significant, currently lingering at around 14%.

Premium grayscale graphics. Source: Bybt

Grayscale has said it intends to convert its flagship crypto funds to ETFs when circumstances permit, as data shows business is anything but bad.

“GBTC is completely dominant in volume compared to peers of bitcoin funds trading 10 times more than any other in dollar terms,” ​​Eric Balchunas, analyst at Bloomberg ETF. Noted Last week.

“If it were an ETF, it would also rank in the top 5%.”

Comparison of the turnover of Bitcoin funds. Source: Eric Balchunas / Twitter