Bitcoin (BTC) faced a challenging week in terms of its price performance. It began to retrace on October 7, following a week of consolidation that followed a consistent uptrend since September 11. Over the past seven days, BTC saw a drop of approximately 4% in its market value as of the time of this report.
However, experts have turned their attention to various factors such as technical analysis (TA), the psychology of the cryptocurrency market, and Bitcoin’s underlying fundamentals in anticipation of a potentially favorable trend in the weeks ahead. Notably, on October 13, Ferrari made a significant announcement that it would be accepting BTC and other cryptocurrencies as payment options in the United States.
Of particular interest is the 4-hour Relative Strength Index (RSI) as a TA indicator, which has indicated that Bitcoin is currently in an oversold condition. This could be interpreted as a ‘buy’ opportunity for the leading cryptocurrency, as reported by Finbold earlier in the week.
Furthermore, in the same report, CrypNuevo had previously predicted that BTC might dip below $27,000 before embarking on an upward trajectory. This prediction was based on the behavior of market makers who often target substantial liquidity pools, taking into account the psychological dynamics of cryptocurrency trading. However, the liquidity situation has now shifted, pointing towards a more positive direction.
According to the Bitcoin liquidation heatmap, there’s a potential for BTC to reach $28,200 in the upcoming week.
Significantly, information sourced from CoinGlass on October 14 reveals that there is an accumulated total of more than $328 million in impending liquidations set at the $28,200 BTC price level on Binance Bitcoin futures contracts. Historically, such situations have acted as a strong attractor in the subsequent weeks, and this instance may follow a similar pattern.
A comparable trend of increased liquidations at higher price levels is evident on various cryptocurrency exchanges, with Binance boasting the largest trading volume.
Nonetheless, even with substantial liquidity reserves for upward price movements, there are still notable liquidations in the opposite direction. This scenario could contribute to a bearish outlook for Bitcoin in the upcoming week. This perspective is further reinforced by Mike McGlone, a Senior Macro Strategist at Bloomberg Intelligence, who suggests that “Bitcoin may pave the way for a significant reset by heading downwards.”
BTC price analysis
At the time of this report, Bitcoin is currently trading at $26,852. This price is notably akin to, but slightly higher than the figure observed exactly one month ago, which stood at $26,418 per BTC on September 14.
Taking everything into account, predicting whether Bitcoin will experience an ‘upward’ or ‘downward’ trend in the upcoming weeks remains uncertain. Nonetheless, there are more prominent factors indicating a potential rise in prices at this juncture. Regardless, traders and investors should prioritize risk management to improve their outcomes and remain vigilant in tracking developments, indicators, news, and macroeconomic trends to gain insights into what lies ahead for BTC.