Bitcoin is starting a new week. With a quiet weekend, BTC stayed just above $19,000. Despite calls to work on the next rally and lower macro bottoms, the pair has yet to make a decision on a trajectory. So what will affect Bitcoin, SHIB and altcoins this week? Here are the important developments…
What does spot price action indicate?
For Bitcoin traders, this is “almost too quiet” when it comes to the BTC/USD weekly chart. There has been an almost startling lack of volatility in the last months, which has been down significantly in volatile conditions in the first half of 2022. Bitcoin historical volatility index (BVOL) is at lows seen only a few times. William Clemente, co-founder of research and trading firm Reflexivity Research, said this indicates “Bitcoin is experiencing a massive volatility squeeze.”
Economist, trader and entrepreneur Alex Krueger also noted an explosive move in BVOL after macro lows. He argued that US macro data would rekindle volatility. However, as we reported as Kriptokoin.com, the numbers were well below the trigger range. “Historically speaking, when BVOL drops below 25, it tends to have a massive spike in volatility shortly after,” crypto research firm Delphi Digital wrote in a section of its Twitter comments.
The question for everyone remained as the direction volatility would take the market. Expectations remained the same for trader Il Capo of Crypto, who predicted Bitcoin’s drop from its all-time high to $20,000. $21,000 should be part of a relief bounce that will only be overshadowed by a fresh dip to multi-year lows for BTC/USD.
New macro triggers are next for BTC, SHIB and altcoins
Little is expected in terms of direct policy changes from the Federal Reserve this week. But there are still many factors that will affect crypto volatility. In the US, tech stocks are particularly prone to move markets if results go beyond expectations, while company earnings calls will come intensely and quickly.
While Fed officials commented on overall policy, they announced that more US data would join earnings calls this week. Beyond equities, the US dollar index (DXY) entered the new week sluggish. He avoided another attack on twenty-year highs. Michaël van de Poppe, founder and CEO of trading firm Eight, hinted this week or next week that there might be a broader “some relief” for risk assets. He states that BTC should clearly break $19,400 and $19,600. In terms of DXY’s structure and returns, he thinks volatility will kick in in 1-2 weeks.
RSI data reflect 2018
Moreover, the picture for Bitcoin is getting darker. Those presenting bearish scenarios from the available chart data are busy making comparisons to the bottom of the 2018 bear market. Among them is popular analyst Matthew Hyland. In a tweet this weekend, Hyland marked Bitcoin’s repetitive behavior of the rising relative strength index (RSI) in 2018. The chart clearly shows the familiar bear market forces at play. This raises doubts about whether we will see the movements of four years ago in the fourth quarter of 2022.
The 2018 RSI breakout structure included a drop from $5,500 to $3,100 for BTC/USD. So it marked a decrease of about 40 percent. “Obviously, we’re still waiting for this big move to come,” Hyland added. He also notes that the classic Bollinger Bands volatility indicator signals a storm.
What is the behavior of investors?
A look at Hodler’s behavior reveals that the stability of the average long-term trader (LTH) remains stable. The latest data from analytics firm Glassnode confirms that the number of Bitcoins lost in cold storage or out of circulation is at a five-year high. The “Hodled” or “Lost Coin” metric, according to the platform, hit 7,554,982,124 BTC (40% of the current supply). Likewise, distribution continues an accelerating trend that can be seen through 2022. The number of wallets with at least one full Bitcoin balance is currently above the all-time high of 908,000.
Glassnode shows that the trend is gaining noticeable momentum this year, while increasing overall in the second half of 2021. Meanwhile, Glassnode, while analyzing lost coins as part of its weekly newsletter “The Week On-Chain,” concluded that the current bear market is no match for others in terms of intensity when it comes to hodlers. However, when it comes to those faltering in bear markets, there appears to be little appetite for capitulation from current price levels.
Fear enters its second month in a row
Nothing seems to change the fear when it comes to crypto market sentiment. According to the Crypto Fear and Greed Index, investors have been feeling “fear” or “extreme fear” for two months straight. As of October 17, the Index is measured at 20/100. It’s about 10 points higher than classic bear market lows. It’s also 14 points higher than this year’s low.
Other important data for Bitcoin, SHIB and other cryptos
It is also useful to look at the various data that will be announced during this week for BTC, SHIB. On Wednesday, October 19, inflation data for the euro zone will be released at 12 o’clock. The “Economic Conditions Report” of the FED will also be released on October 19 at 21:00. US unemployment benefits data will be released at 3:30 p.m. Thursday. Apart from that, the Digital Asset Summit will take place in London on 17-18 October. In addition, earnings reports of many companies such as Bank of America, Goldman Sachs, Tesla during the week may affect the market.
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