Bitcoin (BTC) started October on a positive note, aiming for $28,500 as the Wall Street open approached. The cryptocurrency had experienced a bullish run, gaining momentum into the first United States trading session of the month. The monthly candle completion in September had shown a cool finish for BTC/USD at $26,970, prompting caution among traders and analysts. Despite the monthly close being more than 5% below the spot price, the breakout in October could invalidate the bearish outlook if it sustains.
Rekt Capital, a prominent trader and analyst, highlighted the significance of the September monthly close below $27,100, which solidified it as a resistance level for the month. However, he also noted the potential for an upside wick in the price action, where BTC could reach up to $29,400. He reminded that Bitcoin has previously displayed upside wicks of up to 8%, and with BTC already up 4.5% in October, there is a chance that the current price action could end up as an upside wick.
Market observers also chimed in, noting encouraging signals on exchange order books. The spot bid was showing continued strength, while funding remained negative, indicating skepticism among traders. This disconnect between spot markets and derivatives was seen as an interesting phenomenon in the market, with spot markets driving the move after the Wall Street open.
In a parallel development, the U.S. dollar also surged, eager to hit new local highs. Following Congress’ avoidance of a government shutdown, the U.S. dollar index (DXY) rebounded sharply from its recent losses. At the time of writing, DXY was circling 106.7, just 0.2 points away from its 2023 highs. Crypto analyst Nebraskan Gooner predicted that a breakout from this level could push DXY to 108, marking new 11-month highs.
This strength in the U.S. dollar, along with higher bond yields and oil prices, was viewed unfavorably by economist Mohamed El-Erian. He expressed concern that neither the U.S. economy, particularly its growth and financial stability, nor the markets were benefitting from the DXY’s strength.
Despite the strengthening U.S. dollar, Bitcoin remained unaffected. It continued its bullish momentum, showing resilience in the face of external factors. It is important to note that this article does not offer investment advice or recommendations, as every investment and trading decision carries inherent risks. Readers are encouraged to conduct their own research before making any financial decisions.
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