Lowest search interest since 2020 – 5 things to know about Bitcoin this week

Bitcoin (BTC) has begun its “Uptober” comeback, hitting its highest weekly close in nearly five months and returning to $69,000.

• Expectations of a retest of all-time highs in the third week of October are driving the bulls, but an equally healthy sideways move could come first.
• Unemployment claims and the Fed Beige Book headline this week’s macro data releases, while risk assets ignore US inflation signals.
• Opinions are divided on whether BTC/USD has been able to permanently abandon its seven-month downward trend.
• As Bitcoin derivatives become more active, leverage is causing some analysts headaches.
• There is still no mainstream consumer interest in Bitcoin.

Bitcoin rebounded to $69,000.

BTC/USD’s vaunted weekly close was confirmed at the last minute, according to data from Cointelegraph Markets Pro and TradingView.

The closing price of just over $69,000 was Bitcoin’s highest price since early June.

In response, traders have considered a variety of short-term scenarios, including an initial decline and consolidation before returning to upward momentum.

In a thread dedicated to X, popular trader CrypNuevo noted nearby liquidity as the next BTC price hurdle to overcome.

“There is a key clearing level, at $693,000 to be exact, with upside potential,” he said.

“Liquidations at that level increased over the weekend as some traders began shorting this range. It would make sense to surge to the $69.3,000 level first.”

What happens next may cause temporary pain for the bull. For CrypNuevo, the 4-hourly 50-period exponential moving average (EMA) is currently seeing a retest at $66,888.

“Ideally, we would hold the upper part of the channel so we can identify a breakout and potential upside,” he summarized.

Fellow trader and analyst Daan Crypto Trades analyzed Relative Strength Index (RSI) levels and argued that Bitcoin needs to “lead” the cryptocurrency market to a sustained breakout.

“The key to strength is to maintain momentum from here,” he reiterated in another recent X post.

“$70,000 is a lot.”

Macro boils over ahead of US election

In another quiet week in terms of US macroeconomic data, unemployment remains a key event for cryptocurrency and risk asset traders.

The deadline to file initial unemployment claims is Oct. 24, and will come the day after the Federal Reserve releases its latest update on economic conditions, known as the “Beige Book.”

Inflation remains a major topic of conversation, but stocks have led a rally in risk assets in recent weeks, defying signs of a resurgence in inflation.

“Supercore inflation is now rebounding after falling materially in the first half of 2023. At the same time, core CPI inflation rose to 3.3%, the first increase since March 2023,” trading resource Kobeissi Letter noted in a recent X analysis. I did it.

“The Fed cut interest rates by 50 basis points in September. Was a rate cut of 50bps really necessary?”

Kobeissi noted that earnings season and the U.S. presidential election, now just two weeks away, are likely to shape market sentiment in the near term.

According to the latest data from CME Group’s FedWatch tool, the odds of a 0.25% rate cut at the Fed’s next meeting on November 7, just two days after the election, were more than 90% as of this writing.

“The dollar is surging in anticipation of this,” Matthew Dixon, CEO of cryptocurrency valuation platform Evai, told X followers in part of a recent post on the topic.

“However, crypto assets are defying the risks and are staging a strong rally ahead of the November 5 election. Remember, trends are your friend!”

Debate over BTC price breakout

Bitcoin’s recent moves have brought seven months of BTC price action into focus.

Since hitting an all-time high in March, BTC/USD has been stuck in a downward channel that has continued to deliver lower highs and lows so far.

As Cointelegraph continues to report, the daily timeframe finally saw a candle above channel resistance this weekend, with the weekly close reinforcing the breakout signal.

Renowned trader and analyst Rekt Capital says the next step is “at least” $70,000.

However, not everyone agrees that Bitcoin has completely left the channel.

“A 7-month inverse expansion triangle continues to form,” veteran trader Peter Brandt said of the chart that forms part of the Bitcoin X thread published on October 21 after the weekly close.

“The March 2024 sequence of lower highs and lower troughs has not yet been violated.”

Data from CoinGlass, a monitoring resource showing liquidity levels over the past six months, confirms that current bulk requests are just over $70,000. Additional resistance is seen near $72,000.

Leverage is frowned upon amid record outstanding interest.

Some market observers are already taking a cautious stance as Bitcoin rises to $69,000, generating record levels of open interest.

In one of the Quicktake blog posts on October 19, on-chain analytics platform CryptoQuant warned that leverage was increasing at a worrying rate.

“In the derivatives market, leverage has always been recognized as a key factor in helping traders achieve ideal profitability, while also introducing significant potential risk. Many traders do not take these risks seriously when faced with market volatility,” warned contributor CrazzyBlockk.

The post mentioned an altered version of the Expected Leverage Ratio (ELR) indicator that includes both Bitcoin and stablecoin holdings.

“This is based on the concept that stablecoins have been increasingly used as collateral for derivatives trading in recent years,” CrazzyBlockk explained.

“As a result, looking at this indicator, which has seen a sharp surge, it is clear that the Bitcoin derivatives market is now in the danger zone. This means that whether the market is bullish or bearish, it is prone to impulsive moves.”

Another indicator raising alarms is the Bitcoin Heater from Capriole Investments, a quantitative Bitcoin and digital asset fund.

The tool, which measures the “relative heat of Bitcoin perpetuals, futures and options weighted by open interest,” has now reached its highest level since mid-2022.

AetherX Capital, a popular

“A pullback or correction could be initiated above current levels. Therefore, caution is needed, especially with leveraged positions.”

Bitcoin Retail Interest Still Absent

Despite all the rumors about a return to $69,000, mainstream participation in Bitcoin is still noticeably lacking.

relevant: Bitcoin price analysis shows a rematch of 2021 record highs versus the S&P 500.

Google Trends data highlights the fact that despite being near all-time highs, BTC price action has attracted little attention outside of the cryptocurrency industry.

On a normalized scale of 0-100, the search term “Bitcoin” currently scores a score of 22, its lowest value in a year and one of the lowest in the past four years.

Last week, the popular

“I wouldn’t be surprised if a quick move to 90-100k is what catches their attention,” he wrote in a follow-up discussion.

This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.