Bitcoin (BTC) kicked off a new week, month, and quarter with a strong bullish move, surpassing $28,000. The cryptocurrency achieved its best weekly close since mid-August, leaving market participants excited about what lies ahead in the coming weeks.
While October usually sees tangible price gains for BTC, the immediate answer may not lie in macro triggers. The month began with a quiet phase for United States macro data, and the government managed to avert a shutdown at the last minute. Additionally, Bitcoin fundamentals are not yet reflecting the spike in spot price, as mining difficulty is set to decrease in its next automated readjustment on October 2.
Bitcoin bulls are aware of the possible risk of a price reversal. However, the sudden growth spurt towards the end of the week pushed BTC’s price to nearly $28,000, marking the highest weekly close since mid-August. Traders and analysts are keeping a close eye on the spot order book trends and liquidity levels, which could provide clues about the market’s direction.
Despite the dip in October last year, the current strong start to the month indicates a potentially bullish period. Data from monitoring resource CoinGlass shows that BTC/USD has not finished October lower than it started since 2018. Market commentators are optimistic, drawing parallels to 2021 when Q4 witnessed a new all-time high for Bitcoin.
Bitcoin’s network fundamentals, however, do not currently mirror the positive sentiment in spot markets. The latest estimates show that mining difficulty is expected to decrease by 0.7% in its next readjustment. This is a departure from the usual increase in difficulty seen in recent months. Miner competition remains fierce, and hash rate levels are at all-time highs, supporting the notion that “price follows hash rate.”
While Bitcoin continues its uptrend, the United States macro data is expected to have a calmer start to the month. Lawmakers managed to avert a government shutdown by reaching a deal in Congress. Market participants will closely watch for commentary from Federal Reserve officials, as the next Federal Open Market Committee (FOMC) meeting on interest rate policy approaches. The market is currently uncertain about the FOMC’s decision, with the odds of rates remaining unchanged at 62%.
In summary, Bitcoin has started October on a strong note, with the potential for continued bullish momentum. Traders remain cautious of a potential price reversal, paying attention to spot order book trends. Despite the current positive sentiment, Bitcoin’s network fundamentals are not fully reflecting the price spike. Market participants will also closely monitor upcoming Federal Reserve commentary, as well as the macro data outlook. Overall, the cryptocurrency market is hopeful for a positive “Uptober” and further price gains.
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