Summary:
Bitcoin price is starting October cautiously due to China’s Golden Week holiday.
Analysts warn of a potential 5-10% correction before any upward movement.
Current Bitcoin trading around $63,980, down 0.6% in 24 hours.
Key macroeconomic events this week could influence market dynamics.
Increased volatility is expected in the crypto market with rising implied volatility.
Spot Bitcoin trading has dipped below $65,000, indicating a downside bias.
Analysts caution that Bitcoin's gains may be hitting a short-term ceiling.
Bitcoin's Cautious October Start
The Bitcoin price is facing a cautious start to October as China’s Golden Week holiday kicks off on October 1. This annual celebration often leads to lower trading activity across global markets, including cryptocurrencies, as traders and businesses take a break.
Potential Correction Ahead
Analysts predict a slow market this week, warning that Bitcoin may experience a 5-10% correction before any significant upward momentum can resume. Currently, Bitcoin is trading around $63,980, down 0.6% in the last 24 hours, while Ethereum shows a slight increase at $2,643 according to CoinGecko data.
Key Macroeconomic Events
The subdued performance in the market coincides with several important macroeconomic events this week, including the U.S. initial jobless claims report on October 3 and the U.S. Nonfarm Payrolls and Unemployment Rate on October 4.
Increased Volatility in Crypto Market
Recent overnight trading has indicated signs of increased volatility. Jake Ostrovskis, an OTC trader at Wintermute, noted a rise in implied volatility (IV) for short-term options contracts, suggesting traders expect sharp price swings soon. The recent $5 billion options expiration (OPEX) could contribute to these market fluctuations.
Spot Trading Dynamics
Spot Bitcoin trading has dipped below the $65,000 mark, with the volatility surface suggesting a downside bias until late October or early November. Despite this, there is support for a post-election rally according to current positioning.
Short-Term Analysis
Analysts at Bitfinex caution that Bitcoin's recent gains may be reaching a short-term ceiling. They observe that while Bitcoin has reclaimed key on-chain levels, there are warning signs indicating the market may have reached a temporary equilibrium. Additionally, open interest in Bitcoin futures has surged past $35 billion, historically correlating with local price peaks. A 5-10% pullback could reset open interest without derailing the overall uptrend.
Momentum Indicators
Valentin Fournier from BRN highlights that Bitcoin ended September with a 3.5% loss. The Stochastic RSI signals bullish potential, yet the MACD shows weakening momentum. A dip into the $61,000-$62,500 range could provide a solid foundation for a renewed uptrend.
Market-Moving Events Ahead
Fournier emphasizes that the U.S. unemployment rate will be a crucial market-moving event, with any deviation from the expected 4.2% rate potentially impacting market sentiment and influencing risk assets, including cryptocurrencies.
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