Bitcoin’s rise by a “staggering” 9% in the previous three days brightened up a negative third-quarter close of -12%. QCP Capital analysts warned that the chances of a retest of $25,000 should not be ruled out, despite the positive seasonality.
QCP Capital is not optimistic about the sustainability of the recent rise and stated that BTC may test the critical support level of 25k in the last quarter of 2023, the approved futures Ethereum ETF may divert demand from the spot market, the lower-than-expected core PCE…
— Wu Blockchain (@WuBlockchain) October 2, 2023
According to the data provided, over the past eight years, Bitcoin only ended October with losses in 2018. In other years, the increase varied from 5.5% to 48.5%.
Taking into account November-December, the picture looks less rosy – in the fourth quarter of 2018, digital gold fell in price by almost half, but a year earlier it managed to increase in price by 142.2%.
Experts gave four arguments in favor of the forecast with the price returning to $25,000:
1. So far, this aggressive rebound has been driven almost entirely by external factors like expectations of upcoming approvals SEC first futures ETFs on Ethereum, slowdown Core PCE and neutralization shutdown at least for the next 45 days. Experts doubted the availability of additional “fuel”.
2. Expectations of negative dynamics of futures ETFs on Ethereum based on the behavior of similar Bitcoin-based instruments two years ago.
The reason is the lack of direct influence of demand for a new asset on spot supply. In fact, the exchange-traded fund “absorbs” purchases of physical cryptocurrency, experts emphasized.
3. While continued government funding is positive in the short term, it increases the risk of a shutdown after the specified 45 days.
“We believe that a ‘government shutdown’ would be the best medium-term solution for the markets, since we have established an acceptable price floor amid conversations on this topic,” – analysts indicated.
Historically, there have been five shutdowns since 1995 during which the S&P 500 rose an average of 3.2%. During the last one (the longest period of “closure” in the last 30 years), shares rose by more than 10% before the situation was resolved.
4. The real leaders are gold and real yields US Treasuries. If a deal between Republicans and Democrats causes the latter to rise again, then risk markets will face much more pain.
Bitcoin will not be able to ignore a breakthrough of the Nasdaq 100 index at 14,500 points or the S&P 500 at 4,250 points.
“We are taking advantage of this rally to buy a hedge on the downside. We expect $29,000-$30,000 resistance to become the ceiling. The options market retains a “cheap” opportunity to participate in any sharp downward reversal,” – the experts concluded.
Amid news about the prevention of the shutdown, traders liquidated short positions in crypto derivatives in the amount of $94 million, the maximum for the month.
Macro analyst Noelle Acheson noted that the data presented above is reassuring, especially in light of expectations Uptoberbut do not change her ideas about the instability of the last upward impulse.
“We have seen several of these sharp spikes over the past few months. They are usually followed by a correction, sometimes sharp and sometimes gradual, but almost always returning to the state in which the market was before the upward movement.” – she said.
Let us remind you that BitMEX co-founder Arthur Hayes admitted that the price of the first cryptocurrency may briefly drop below $20,000, followed by a new bullish impulse. However, in September he pointed to the positive outlook for digital gold, contrary to the Fed’s policy.
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