Key Highlights

  • Bitcoin's price dipped to $81,749.83 today, breaching yesterday's support level of $82,776.30, currently trading around $82,486.
  • On October 7, Bitcoin ETFs experienced a loss of $484.9 million, marking the steepest decline since June, with 87.5% of the $429 million liquidated in that period coming from long positions.
  • While October, often referred to as Uptober, has started off poorly, technical indicators suggest that Bitcoin still has room to recover before facing severe declines.

Traditionally, October is celebrated in cryptocurrency communities as Uptober, the month when Bitcoin is expected to yield substantial returns for investors, but the current market trends suggest a reversal of this expectation.

Bitcoin has seen a decline, dropping 2.67% over the past day to a price of $81,125, nearly halving its September gains. This trend contradicts the historical pattern of a "Red September" followed by a promising Uptober—a similar situation unfolded last year as well.

Myriad: Predict how low Bitcoin could go.

Several macroeconomic factors are currently pressuring Bitcoin's price.

On Wednesday, Wall Street experienced a downturn as Brent crude oil prices approached $100 per barrel and Treasury yields remained at their highest levels since 2002. Additionally, minutes from the latest Federal Reserve meeting indicated that most officials anticipate another interest rate hike by year-end.

These factors have contributed to Bitcoin's ongoing struggles. The recent price decline for BTC is showing signs of slowing but is not yet halted. Bitcoin's price dropped alongside stocks and gold, yet it still indicated a bullish trend on the daily chart compared to a bearish outlook on the four-hour chart.

This divergence persists today.

Bitcoin Price Analysis: Daily Trends and Support Levels

Today’s daily candle opened at $83,310.16 but struggled to rise significantly, peaking at $83,475.78 before retreating to lows around $81,337, representing a 2.37% decline. This drop fell below the previously identified support level of $82,776.30, placing BTC beneath a short-term price range of $82,626.41.

After reaching a peak of $87,354.33 on September 21, Bitcoin traded within a range of approximately $83,000 to $87,000 for over two weeks, and is now roughly 5.6% lower than that peak.

The Average Directional Index (ADX), which assesses trend strength regardless of direction, shows a reading of 40.7 today, down from 42.8 yesterday. While buying pressure (+DI) continues to outpace selling pressure (-DI), the bullish momentum is gradually diminishing.

The 50-day exponential moving average (EMA) remains above the 200-day EMA, indicating a sustained long-term uptrend. The golden cross, a key bullish indicator in technical analysis, is still valid on the daily chart but is beginning to show weakness on shorter timeframes as Bitcoin nears the EMA200 line.

Despite the bullish indicators, momentum appears weaker than the trend strength indicates. The Relative Strength Index (RSI), which measures buying and selling pressure on a scale from 0 to 100, dropped to 45.8 from 52.5 yesterday, dipping below the neutral 50-point line. The Squeeze Momentum Indicator is still active, suggesting that volatility is building up for a potential significant move.

Bitcoin ETFs faced significant outflows of $484.9 million on October 7, their largest daily loss since June, according to ETF flow data from Decrypt. This single day wiped out approximately 81% of the $595.3 million that had flowed in over the preceding nine days, reducing the 10-day net inflow to $110.4 million. Overall net inflows remain at $57.8 billion, indicating a minor setback rather than a mass exodus.

Bitcoin ETF flows. Image: Decrypt

Leverage played a role in amplifying the downturn, with around $429 million in positions liquidated over 24 hours, as reported by CoinGlass, with 87.5% of these being long positions. Liquidations occur when an exchange forcibly closes a leveraged trade that can no longer sustain its losses, resulting in additional downward pressure on prices.

The liquidated amounts included $135.51 million in Bitcoin and $96.14 million in Ethereum, with nearly half of the total, $202.24 million, occurring in the last four hours. Although this is significantly less than the previous day's $969 million, it indicates that long positions are still being liquidated.

Looking Ahead

A daily close below $82,626.41 would signal a breach of weak support and suggest the continuation of a short-term bearish correction. Conversely, a close above this level would maintain the multi-week trading range.

Below this level lies a crucial zone between $81,165.95 and $79,705.49, where pullbacks during upward trends typically attract buyers, and the upper edge of the daily trend band at $79,661.95 is located just about $44 from the lower boundary of this zone.

Upcoming factors to monitor include oil and shipping news from the Strait of Hormuz, Treasury yield movements, daily ETF flows, and the Federal Reserve's meeting on October 27-28, where further rate hikes are not expected.