Over the past week, Bitcoin price reached new multi-month highs largely due to the euphoria of the potential approval of a spot exchange-traded fund (ETF). While the recent momentum appears to have waned in the past few days, there are signs that the premier cryptocurrency may not be done just yet.
Crypto analytics platform IntoTheBlock has offered an insight into the present action and future trajectory of Bitcoin, highlighting major levels investors might want to keep an eye on.
This Could Happen If Bitcoin Price Closes Above $35,000
In a post on the X (formerly Twitter) platform, IntoTheBlock shared the next Bitcoin price levels to watch out for. The on-chain data tracker stated that investors can identify where the price of BTC may be heading based on the recent buying activity recorded on-chain.
Bitcoin Levels to Watch – Based on buying activity recorded on-chain, we can identify price levels where BTC may be heading next
🔼The recent high of $35,000 is the next resistance point for Bitcoin, where previously 664,000 holders bought 340k BTC 🔼If this level is surpassed,… pic.twitter.com/63oBOngxBQ
According to IntoTheBlock’s analysis, the recent multi-month high of $35,000 is the next major resistance level for Bitcoin. On Wednesday, October 25, Bitcoin touched – albeit failed to close above – the $35,000 mark for the first time since mid-2022
Furthermore, the on-chain analytics platform highlighted that more than 664,000 addresses bought about 340,000 BTC at the $35,000 level. If Bitcoin’s price manages to breach and stay above this mark, investors could see the market leader travel to around $39,000, where the next major resistance lies.
On the flip side, if the current momentum continues to cool off and there is further downward movement, the BTC price could go as low as the $30,000 mark. According to IntoTheBlock, there seems to be concentrated buying activity just above the psychological price level, with nearly 1.5 million addresses purchasing 553,000 BTC around this point.
After a memorable week dominated by the anticipation of a Bitcoin spot ETF, the Bitcoin price has been relatively quiet in the past few days. As of this writing, the premier cryptocurrency trades at $34,121, reflecting no significant price change in the past 24 hours.
In a separate report, IntoTheBlock has highlighted the rise of institutional interest in Bitcoin. According to data from the on-chain analytics platform, the number of BTC transactions over $100,000 surpassed 23,400 on Tuesday, October 24, marking a new high in 2023.
Number of Bitcoin Large Transactions | Source: IntoTheBlock/X
IntoTheBlock specifically pointed to the recent spot exchange-traded fund as the force behind the rising institutional interest in Bitcoin. The last time this metric witnessed a significant spike was in June 2023 when BlackRock filed for a BTC spot ETF.
Bitcoin price trades around $34,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
The price of Bitcoin stands firm around the critical area of $34,000, hinting at further bullish potential. However, market analysts wonder if enough clues point to the upside or if BTC will return to $20,000.
As of this writing, BTC trades at $34,150 with sideways movement in the last 24 hours. The cryptocurrency recorded a 15% profit the previous week and remains a top coin performer by market cap.
Bitcoin On-Chain Activity Rises Hinting At A Bull Run?
Data from the analytics platform mempool.space shows an increase in on-chain activity on the Bitcoin network. This spike occurred in February 2023, when BTC transactions rose above 50 Mega Virtual bytes (MvB).
According to the analytics platform, the above metric measures the size of transactions and blocks on the BTC network. The larger the transaction, the more space they required.
As seen in the chart below, each time there is a rise in the price of BTC, there is a surge of activity leading to the rally. This happened in 2017, and 2021, and it is happening this year, which suggests the ecosystem is blooming, onboarding more users, and preparing for a more significant rally like in the previous year.
BTC on-chain activity on the rise in 2023, increase precedes market rally? Source: mempool.space
In addition to the increase in activity, it is possible to see the decline in the metric during the bear market and conclude bull markets record high activity. In contrast, the bear market records much less user activity, and they are generally cheaper to transact.
However, unlike 2017 and 2021, this year, this ecosystem saw the implementation of non-fungible tokens (NFTs) and new applications boosting these metrics. Thus, it is harder to determine if the current rally can reach similar levels than in previous years as the BTC DeFi ecosystem attracts more users looking to leverage the network for utility rather than long-term investing.
BTC DeFi Makes A Difference In Key BTC Metric? A Chat With The Team Behind “Leather”
The surge in BTC on-chain activity could be attributed to the cyclical nature of the crypto market. When the price of BTC and others rise, or there is an expectation of further profits, more users on-board the network.
As a result, the number of transactions recorded increases. However, many believe that with the implementation of NFTs in the BTC ecosystem, transaction activity can no longer be attributed to a new bullish cycle.
If so, rising activity metrics could become useless when measuring the sustainability of a BTC rally. To answer this question, we spoke with Mark Hendrickson, a General Manager at Trust Machines, a company working on a Bitcoin DeFi wallet. This is what he told us:
What is “Leather,” and what is your goal in the Bitcoin ecosystem?
A: Leather is a web3 wallets built around Bitcoin based technologies and applications. And so you can think of Leather, simply put as MetaMask for Bitcoin in the sense that we want to provide a robust user experience for connecting to applications built with Bitcoin and Bitcoin layers in which users can do a lot of the same sort of things that they can concurrently only do on smart contracts enabled L1 chains, but to do them actually on Bitcoin.
So, Leather has the ability to connect the applications, identify yourself to those applications based on your Bitcoin addresses and your associated assets with those applications prompts for signed transactions that are essentially actions for those applications and to do so across layers. (…) We also want to facilitate the movement of liquidity between L1 and L2 (networks) and do so in a very seamless manner.
A lot of people, for many reasons, are unfamiliar with the Bitcoin DeFi ecosystem. Can you tell us more about it, and what is Leather’s role in it? Also, what do you say to users who want Bitcoin to remain unchanged, the way it has been since its inception in 2009?
A: Bitcoin based DeFi, I’d say is generally taking place these days or sort of emerging in two places. You have primitives for Bitcoin based divide on Bitcoin itself. That’s an L1 (Layer one), mostly driven by Ordinals and within Ordinals fungible token standards like BRC 20. And then you have also Bitcoin related taking place on Layer2 like Stacks that have smart contract functionality. (…) most of that’s taking place via Ordinals on the layers. It’s taking place mostly through the native smart contracting capabilities of those layers.
To the question of people who want Bitcoin to remain unchanged, I think that the folks who are working on Bitcoin-related functionality, I’d say Bitcoin web3 in general, which includes DeFi. We’re trying actually to do more with Bitcoin without having to change Bitcoin really at all. So actually our general approach is to try to extend what you can do with Bitcoin without having to change it fundamentally because we do, of course, want to respect all the work that’s gone into Bitcoin to date and we’d love the security profile of Bitcoin. And that has to do with taking a relatively conservative approach. And so if you look at Ordinals, for example, which is really an innovation based on taproot introduced fairly recently, there’s a lot of innovation going on as a result of taproot ordinals without having really changed anything else about Bitcoin. It is a design space that is actually quite respectful of Bitcoin as blockchain.
There is a theory that every bull run is preceded by an increase in on-chain activity, with fees following prices on their way to new highs. What do you think of network activity right now? Do you think much of it can now be attributed to Ordinals and other applications?
A: Going back to the start of the year, Ordinals has been a huge exception to the general rule of the crypto bear market because we’ve experienced essentially two bull runs inside of Ordinals itself, which I think have boosted Bitcoin’s position and definitely has boosted network activity on Bitcoin and fee rates have gone up as a result of it. And really shown that this idea of storing data on chain on Bitcoin beyond just simple transactions and applying those primitives to various web3 applications, whether it’s art or whether it’s new token standards, that can have a huge effect on just how Bitcoin is used and also valued. (…) it’s hard for me to really pinpoint any given reason why any given month the Bitcoin may have gone up in price because of other factors, but it, it’s pretty clear that it has an overall effect (on network activity). Ordinals has been a positive influence on the interest in Bitcoin.
ETFs, store of value, Gold 2.0, Halving, and now Bitcoin DeFi, what is the current narrative dominating the BTC market? And which narrative will gain more prominence in the long run?
A: I think the dominant narrative around Bitcoin is probably that in the wake of the last crash, really it’s a spillover from last year. I think there are a lot of weaker technologies, weaker platforms and assets that were shaken out and people ran away from and they’ve taken more safe harbor and Bitcoin come back to Bitcoin as really the one that’s stood the test of time. So that combined with the fact that people, since the start of the year with Ordinals in particular have opened up to that there are more frontiers to what you can do with Bitcoin. I think that combination has really driven sort of a renewed enthusiasm around Bitcoin. It’s a combination of, it’s been around the longest, it’s the most secure, plus it’s not a dinosaur that can’t evolve still. It actually has a lot of potential. It actually has both of those qualities that are very attractive, secure and conservative in one way, but it’s also more innovative and there’s more potential than people had realized before on the other hand.
Bitcoin saw a brief stall in its rally which triggered a decline back down to $33,700. This decline, seemingly out of nowhere, may have not been random given some developments in the crypto space. As the rally resumes once more, here’s a look at these developments.
The listing would remain off the site for several hours while community members speculated on what could be the cause of this. Around this time, the price of Bitcoin began to fall, seemingly driven by the fact that investors saw the removal of the BlackRock listing as a sign that a Spot Bitcoin ETF wasn’t coming as soon as they expected.
Hours later, Bloomberg Analyst Joe Light revealed that the listing was back up on the site. Apparently, the initial listing and the subsequent ones had carried one small change in detail which was a change in the Create/Redeem section from a “Y” to a “N.”
Another Bloomberg analyst James Seyffart explained that this likely meant that it was to indicate whether the ETF listing was open to creations/redemptions. When Light asked if this change could point out a launch without using that attribute, to which Seyffart said:
“I personally don’t think this means all that much if I’m being honest. Think it indicates Blackrock is getting everything ready to launch if and when they get an SEC approval. And that the N just means it’s not open for create redeem because it’s not live yet.”
The return of the BlackRock Spot Bitcoin ETF on the DTCC sparked enthusiasm across the space once more than it did before. The price of Bitcoin quickly started to recover and by Wednesday morning, was back above the $34,000 mark once more.
These events outline the importance of a Spot ETF and how it is the major driver behind the most recent price rally. So an approval or a rejection would both have a major impact on the digital asset’s price. For one, an approval would likely see Bitcoin clear above $40,000. However, a rejection would be detrimental to the rally, and will probably send it back below $30,000.
Presently, Bitcoin is maintaining bullish momentum above $34,100. But it is seeing small losses of 0.99% on the 24-hour chart, and its daily trading volume is down 34.58%.
The price of BTC continues to push higher, and the bullish momentum remains intact as news around the Bitcoin ETF (Exchange Traded Fund) improves overall sentiment. In the wake of the recent rally, some trading firms doubled down on their bullish positions.
As of this writing, the price of Bitcoin stands at $24,200 with sideways movement in the last 24 hours. The cryptocurrency rose by over 20% the previous week, operating as the top performer in the top 10 by market capitalization.
Bitcoin ETF To Trigger Larger Rally: What’s The Target?
Via social media platform X, trading desk QCP Capital disclosed their positions coming into the rally. The firm longed Bitcoin volatility with options contracts, taking some profits on their positions as the cryptocurrency rallied.
Still, the firm remains optimistic, holding on to their calls due to expiry in December. By then, the firm targets a BTC price above $38,000 to $44,000, based on the momentum generated by a potential Bitcoin ETF approval.
In the last week, the news generated by this event has shifted market sentiment, leading investors to a more favorable area. However, the firm remains cautious about the US Securities and Exchange Commission (SEC) approving a spot Bitcoin ETF in the short term.
QCP Capital stated:
(…) we believe the SEC will avoid playing the role of kingmaker, sticking with its own precedent set during the BTC/ETH futures ETF approval process and will wait to approve multiple managers at the same time. Nonetheless with this bullish break of 32k, we believe the market has started to price in an approval as the base case. The only question now is when the approval will happen.
BTC’s price is approaching 0.38 Fibonacci levels, which hints at a reversal. Source: QCP Capital
SEC To Avoid Kingmaking In Bitcoin ETF Approval.
The trading firm believes the financial instrument will get approved in 2024. The SEC will likely avoid favoring one firm to prevent BlackRock or other asset managers from taking a large portion of the clients and the trading volume, as when the future Bitcoin ETF was approved.
The firm believes the financial instrument could get approved “much later than the market expects now.” As mentioned, investors have begun pricing in any price action associated with the ETF, which could lead BTC to another range until 2024.
The firm cautioned players from taking late long positions:
(…) we are seeing stretched positive perp funding rates especially on Deribit (BTC over 70% and ETH over 100%) as well as elevated short-end ATM vols (BTC up to 75%!) – typically indicative of an exhausted short-term move.
Stephan Livera, an esteemed host of his namesake podcast and Swan Bitcoin’s Head of Education, has now provided the crypto community with projections for Bitcoin’s future trajectory. This week, Bitcoin experienced a rally that took its price to as high as $35,000, marking its highest point since May 2022.
However, amid the favorable climate around a potential spot Bitcoin exchange-traded fund (ETF) approval and institutional adoption, Livera posits that this surge is merely the precursor to a much grander bull run.
The Potential Impetus: A Spot Bitcoin ETF
Approval of a spot Bitcoin ETF could be a game-changer for Bitcoin’s valuation, according to Livera. Conversing with Michelle Makori, the Lead Anchor and Editor-in-Chief at Kitco News, during the Pacific Bitcoin Festival, Livera emphasized the possible ripple effects of such an approval.
While murmurs suggest that ETF approval might be on the horizon by the close of this year, Livera diverges from this sentiment. Livera anticipates this landmark event to materialize more likely in 2024. The Head of Education at Swan Bitcoin noted:
Although many experts predict that [a spot Bitcoin ETF] will come in three to six months, I don’t believe it will happen this year. Next year is the more likely scenario … in the first or second quarter of 2024, which would coincide with the halving cycle, which is expected in April.
Notably, a significant event, such as the halving cycle, will impact Bitcoin’s market dynamics. Historically, this event – which slices the miners’ reward for new block addition to the Bitcoin blockchain by half – has spurred price shifts.
The upcoming cycle will set the block reward at 3.125 BTC. This, combined with the potential spot ETF approval, could catalyze a heightened interest and influx of investments into Bitcoin, according to Livera.
Projected Peaks And Troughs: The BTC Landscape
Livera offers a roadmap of Bitcoin’s possible pricing journey. The Swan Bitcoin’s Head of Education foresees a stabilization around the $30,000 mark shortly, with a potential escalation toward $40,000 as we approach next year’s halving event.
But the real fireworks might commence after the halving, ushering in a wild bull run. Expounding on historical trends, Livera shared:
Historically, what we’ve seen around the halving is a bit of a rise into the halving, then a bit of a selloff after. Six to 12 months out, that’s when the real crazy bull run happens, and you get 10x or 20x in the Bitcoin price at that point.
This extrapolation by Livera culminates in a noteworthy prediction for the end of 2024 – a bold ascent, perhaps reaching roughly $500,000 by 2025 or early 2026, according to the expert.
However, the climb might be coupled with a steep decline. Drawing parallels to gold, Livera posits Bitcoin could potentially mimic its valuation range. Livera added, emphasizing the volatility of the crypto domain:
It’s quite possible that Bitcoin comes close to the range of gold, and that would imply a price in the $500k range. As is a tradition in this industry, we’ll probably hit that as a blow-off top, followed by a drop of 80%. So, it might go to $500k and then crash to $100k.
Bitcoin (BTC) price is moving sideways on the 4-hour chart. Source: BTC/USDT on TradingView.com
Featured image from Unsplash, Chart from TradingView
The flagship cryptocurrency, Bitcoin, is fast approaching $31,000 following its gains over the weekend. Analyzing this price action, crypto analyst Ali Martinez has predicted Bitcoin’s future trajectory as he suggests that the bears could regain dominance soon enough.
A Price Correction Imminent For Bitcoin
In a post shared on his X (formerly Twitter) platform, Martinez noted the potential head-and-shoulders pattern that was forming on the Bitcoin daily chart following its upward trend. This chart pattern has always been considered bearish as it suggests that a trend reversal might be on the horizon, meaning there could be a dip in prices soon enough.
Source: X
Confirming this assumption, Martinez stated that the daily chart (which he shared alongside the post) “hints at a possible sell signal emerging tomorrow [October 23].” According to him, this prediction is backed by the TD Sequential indicator, which is flashing “a green 9 candlestick.” The TD Sequential indicator helps traders identify the exact time of a potential reversal.
Martinez also alluded to the Relative Strength Index (RSI), which he mentioned has reached 74.21. He noted that this has been “a level triggering sharp corrections since March.” An RSI of over 70 also suggests that Bitcoin may be overbought with a price correction imminent. This impending price correction can only be averted if Bitcoin manages to clock “a daily candlestick close above $31,560.”
As of the time of writing, Bitcoin is trading at around $30,700, up by over 2% in the last twenty-four hours and a further 10% in the last seven days.
Options Market Could Contribute To Bitcoin’s Upward Momentum
In a post on his X platform, Alex Thorn, Head of Firmwide Research, highlighted the role that options traders (short gammas in particular) could play in driving Bitcoin’s price higher in the short term.
Source: X
He noted that the options market makers in Bitcoin are “increasingly short gamma as BTC spot price moves up.” This current positioning could help “amplify the explosiveness of any short-term upward move in the near term,” considering that these short gammas have to buy more Bitcoin to stay “delta neutral” as Bitcoin’s price continues to rise.
From his analysis, Thorn was simply explaining that the option market makers will have to place ‘buy orders’ to hedge against their short positions as Bitcoin’s price continues to climb, thereby adding to buying pressure, which could cause the crypto’s price to rise higher.
Meanwhile, he believes that the long gammas could provide a safety net for Bitcoin’s price in the event of a price reversal. These long gammas would have to buy back spots in order to remain delta-neutral, thereby providing support and helping resist any further decline (in the short term, at least).
According to a report by the global investment bank Morgan Stanley, signs indicate that the cyclical “crypto winter” bear market, which has plagued the cryptocurrency industry, may finally end.
The report explores the historical pattern of Bitcoin’s (BTC) performance following halving events that occur approximately every four years. Furthermore, the report estimates that the next halving event could occur around April 2024.
The Cyclical Nature Of Crypto Markets
Per the report, Bitcoin, the dominant cryptocurrency, is a barometer for the overall crypto market. One distinctive feature of Bitcoin is its halving process, which creates scarcity and helps maintain its value.
Every four years, the number of BTC generated every 10 minutes is halved. This deliberate reduction in supply has historically affected Bitcoin’s price, often triggering a bullish market rally.
Previous cycles have witnessed three notable bull runs that lasted 12 to 18 months after each halving event.
The four-year cryptocurrency cycle aligns with the seasons, providing a framework to understand market behavior:
According to Morgan Stanley, summer represents the phase immediately following a halving event, during which Bitcoin’s price gains are typically observed until it reaches a new peak.
Fall signifies when Bitcoin surpasses its previous high, attracting media attention, new investors, and businesses. This phase indicates that the bull market is nearing its end.
Winter characterizes the bear-market decline, initiated by profit-taking and selling pressure from investors, resulting in price drops. This phase persists until the next market trough, typically around 13 months.
Spring is the phase leading up to the next halving event, during which Bitcoin’s price generally recovers from the cycle’s low point. However, investor interest tends to remain relatively weak during this period.
Gauging Indicators To Ascertain The Transition From Winter To Spring
Determining whether crypto spring has truly arrived requires considering several factors. These include the time elapsed since the last peak, the magnitude of Bitcoin’s drawdown from its high, miner capitulation, the Bitcoin price-to-thermocap multiple, exchange-related issues, and price action.
These indicators can provide insights into whether the market has reached a trough or is still experiencing crypto winter.
While the report suggests that crypto winter may be in the past and crypto spring is on the horizon, it emphasizes the importance of learning more about the crypto market’s cyclical tendencies.
The daily chart shows BTC’s sideways price action over the past 24 hours. Source: BTCUSDT on TradingView.com
BTC is trading at $28,500, showing a modest recovery in the past 24 hours after an unsuccessful attempt to stabilize above $30,000 on Monday, followed by a subsequent decline to the $28,000.
Notwithstanding this recent volatility, Bitcoin has maintained substantial gains across various time frames. It has experienced a notable surge of 7.4% over the past seven days, 4% over the past fourteen days, 5% over the past thirty days, and an impressive 49% surge over one year.
Featured image from Shutterstock, chart from TradingView.com
Source: X