Bitcoin (BTC) begins a new week, month, and quarter with a strong bullish move, surpassing $28,000. This marks the best weekly close for the largest cryptocurrency since mid-August. Market participants were prepared for a potentially volatile monthly close, but the bulls ultimately emerged victorious. As October is historically a month of significant BTC price gains, there is excitement about what the coming weeks may bring. However, macro triggers may not immediately impact the price, as October starts with a quiet phase for US macro data and the government averts a shutdown at the last minute.
Bitcoin bulls are aware of the risk of a price reversal. The sudden growth spurt in BTC took its price just shy of $28,000, reaching new local highs of $28,451. Some traders warned of the potential for a comedown, pointing to wider exchange order books and increasing ask liquidity. BTC is now contending with resistance at the 200-week moving average at $27,970. Traders expect volatility to continue over the next 24 hours.
Bitcoin’s strong start to October contradicts last year’s trend when a dip in price at the beginning of the month led to a sideways period and a market downturn in Q4. However, historical data suggests that BTC/USD has not finished October lower than it started since 2018. Market commentators and analysts are optimistic about Bitcoin’s performance this month, with some suggesting that it is experiencing a significant trend change and could surpass $30,000 for the first time since June.
While Bitcoin’s spot price is performing well, Bitcoin network fundamentals are not reflecting the same bullish sentiment. The mining difficulty is set to decrease at its next automated readjustment, despite currently being at all-time highs. Miner competition remains fierce, but with the increase in hash rate, the classic saying “price follows hash rate” is gaining attention once again. Fed speakers will also be in the spotlight this month, as markets look for clues in their language ahead of the next Federal Open Market Committee meeting to decide interest rate policy.
