Historically, October is a bullish month for bitcoin.
As the US elections approach, volatility may increase.
The price of bitcoin (BTC) began the second week of October today by rising to around $64,000 (USD), which shows greater strength in the market.
Bitcoin exhibits an appreciation of 8% since the fall to USD 59,000 that it registered last Thursday. Such a decline was pressured in part by the escalation of war between Israel and Iran, which drove investors away from the markets.
The rise since then, in correlation with stocks, was motivated by the informe employment in the United States on Friday. It revealed that 254,000 jobs were added in September, 150,000 more than expected. In this way, the result reduces fears of recession and facilitates a more gradual cut in interest rates.
With this report, expectations of a 50 basis point cut in rates for the next decision, on November 7, were dashed. 89% now foresee a reduction of 25 basis points on such occasion, while 11% expect it to remain unchanged. This is what the data shows polled by CME Group.
“There is greater optimism for a soft landing,” commented In this regard, Min Jung, analyst at the market research company Presto Research. This concept refers to a controlled slowdown in the growth of the economy without causing a recession.
Rates are currently at 475-500 basis points, following a 50 basis point cut last month for the first time in more than four years. With this movement, a stage of reductions began that increases liquidity in the economy, as well as demonstrates its greater weakness.
“It tends to encourage a riskier attitude among investors, which benefits assets like bitcoin,” Rachel Lucas, an analyst at BTCMarkets, explained about the cut. However, he added that There are still key price levels, according to technical analysis, that the currency must reach to sharpen its rise.
“To maintain this recovery, bitcoin would have to break and maintain the key resistance at USD 64,500,” he highlighted. “If it does, we could see a new test of USD 66,000,” Lucas said.
As the following graph shows, these price levels have functioned as resistance recently, that is, areas of maximums due to greater supply than demand. Therefore, they may turn out to be psychological barriers that the market must overcome and convert into support, as it acted at times in the last seven months.
Meanwhile, geopolitical tensions in the Middle East present a risk to the sustainability of the recent market rally. Although, the approach of the US presidential elections predicts positive winds for the bitcoin ecosystem.
As CriptoNoticias reported, the bitcoin and cryptocurrency ecosystem has attracted bipartisan support from US candidates. Therefore, he could gain traction with his comments as the elections, scheduled for November 5, approach.
October shows positive factors for bitcoin
Beyond the macroeconomic and political environment, October has historically been a strong month for bitcoinwhich is why it is known as “uptober”. For this reason, Lucas warns that “analysts are optimistic that the recovery could gain pace as the month progresses.”
“According to history, the bull market should start here,” projection today the trader known as Crypto Rover. He argues such a forecast because 166 days have passed since the last halving, an event that reduces the issuance of bitcoin by half every four years. Historically, after such a period of time, a sustained rise in price has begun.
However, specialists such as the pseudonymous trader “ChartingProdigy”, consider that “the uptober bull trap rally begins.” They base this on the fact that the relative strength index (RSI), which measures the momentum of movements, is increasing. This means that the market is overheating and could crash.
