Bitcoin traders find themselves on edge as BTC prices surged to $68,393, reaching an 11-week high. However, the BTC/USD pair remains around $67,993 as of press time, influenced by mixed U.S. unemployment data showing jobless claims lower than anticipated but ongoing claims slightly higher than expected.
The complex data set caused market suspense, especially regarding how the Federal Reserve will handle upcoming rate cuts. Based on CME Group’s FedWatch Tool, the likelihood of a 0.25% rate decrease in November remains strong, but confidence in broader monetary easing has cooled.
With the absence of prompt macroeconomic drivers, traders have turned their attention to the U.S. presidential election, which coincides with the Fed’s November meeting. The intersection of these events could create heightened volatility in Bitcoin and altcoins like XRP, drawing traders to hedge their bets on price movements.
Bitcoin Demand Rises as Traders Look to Market Fundamentals
On-chain data suggests increased Bitcoin demand, implying the possibility for further value gains. A weekly report from CryptoQuant portrays Bitcoin demand bearing 177,000 BTC. Historically, when demand reaches this level, as seen in 2020 and 2021, the token costs tend to spike.
The revival in demand comes at a time when large investors, commonly known as “whales,” continue accumulating tokens, adding more bullish sentiment to the market. According to the report, whale holdings, excluding exchanges and mining pools, now total 670,000 BTC, surpassing the prior year’s numbers. Additionally, these holdings are growing faster than the 365-day MA, a trend that might further influence the cryptocurrency’s price action.
This accumulation pattern, coupled with the token’s seasonal tendencies to perform well in Q4 during halving years, creates anticipation for a potential surge toward new all-time highs. In similar years—2012, 2016, and 2020—Bitcoin gained 9%, 59%, and 171%, respectively, during this period.
Bitcoin Price Action Sparks Mixed Sentiment Among Traders
Despite the positive long-term outlook, short-term traders are cautious. The spike to $68,393 led some analysts to speculate whether bulls could maintain momentum or if a correction looms. For instance, derivatives trader TheKingfisher observed that the cryptocurrency’s current price level parallels July 2023, when BTC briefly surged before plummeting to $49,000 within days.
$BTC Current trading activity around 68.4k is linked to earlier volatility from July 29, when prices dropped to 49k just five days later. The recent spike in volatility suggests options hedging is getting more expensive, and leverage is costing more as volatility rises. Even… pic.twitter.com/MeDtjSG1IU
— TheKingfisher (@kingfisher_btc) October 17, 2024
The analyst further pointed out that increasing Bitcoin volatility drives up the cost of both hedging and leverage, posing risks for traders with high-leverage positions. According to the analyst, even those using 50x leverage have not yet faced liquidation, with the cryptocurrency stabilizing at around $67k.
However, TheKingfisher cautioned that the situation remains precarious, with a 62.48% likelihood of liquidation in the near term. If such liquidations occur, they could drag the token prices down to $61,300, a level the analyst described as potentially painful for the market.
Next Steps: $70K Target, But Risks Remain
On a more positive note, the analyst also addressed the bullish outlook, noting that the token’s latest short squeeze had primarily run its course, leaving one more critical resistance level at $71,300. Per the analyst, traders may see a run-up to $73,000 if the market pushes beyond this level. However, a move to this range could trigger another deleveraging event, pulling the cryptocurrency back toward $60,000 and resetting the market.
For now, Bitcoin’s price seems poised between two key levels: $60,200 and $71,300. How the cryptocurrency performs within this range will likely dictate its next move. With the z-score signal suggesting short positions around $67,800, similar to support levels seen at $63,081 in the past, traders are preparing for potential price fluctuations.
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