Bitcoin (BTC) has started the second week of October up 4% month-to-date as geopolitical instability captures the market’s attention. The price of BTC has remained steady at $28,000, but the reaction to the ongoing conflict in Israel could bring volatility to the market. Despite the current stability, on-chain metrics point to interesting times ahead for Bitcoin.
Over the weekend, Bitcoin’s price action has centered around $28,000, with traders hoping for a resistance/support flip. However, BTC has yet to decisively break through its 200-week moving average at $28,176. Traders and analysts are closely watching these key levels to determine the next price movement.
While Bitcoin has remained relatively stable, the conflict in Israel has brought war back into the focus of crypto observers. Traders are anticipating increased volatility as a result of the ongoing conflict. The memory of Bitcoin’s reaction to the war in Ukraine in February 2022 still lingers, and market participants are cautious about what might happen next.
Bitcoin is currently showing a “risk-off tilt” among traders, according to Mike McGlone, senior macro strategist at Bloomberg Intelligence. He believes that the downward sloping 100-week moving average is likely to win over the up trending 50-week moving average. McGlone points to spiking crude oil prices as a liquidity pressure factor that could affect Bitcoin’s price.
The coming days will see the release of the September Consumer Price Index (CPI) in the US, which holds additional importance for the Federal Reserve. After surprise employment data last week, market participants are looking for clues about the likelihood of another interest rate hike. A hot CPI could push Bitcoin back into the range lows if it suggests the Fed might be forced to hike rates.
In addition to the CPI, this week will see the release of the Producer Price Index (PPI), jobless claims data, and commentary from 12 Fed speakers. The market will also react to geopolitical tensions from the weekend, adding to the overall volatility.
On-chain metrics indicate potential volatility ahead for Bitcoin. The network value to transaction (NVT) signal, which estimates local BTC price tops and bottoms, has spiked to its highest levels in five years. This suggests a changing perspective on Bitcoin’s value, with growing recognition of its role as a store of value.
Overall, market sentiment remains indecisive, as shown by the Crypto Fear & Greed Index, which is currently in neutral territory. While some investors are optimistic about buying opportunities at lower price levels, the market’s overall sentiment is uncertain.
As with any investment or trading decision, there are risks involved. Investors should conduct their own research and make informed decisions based on their individual circumstances.