- Bitcoin’s Uptober rally stalls.
- The leading cryptocurrency is still showing positive signs.
- Uncertainty swirls as the wider economy shows continued weakness.
Bitcoin bulls were optimistic when BTC closed above $28,000 on October 1st, spurring hopes that “Uptober” would bring more of the same. However, the rally has since sputtered, with BTC’s price slipping over the last few days. Despite this pullback dampening spirits, all is not lost given that the leading digital asset’s uptrend remains intact.
Bitcoin’s Uptrend Holds
Bitcoin’s Sunday rally brought a sense of confidence for the month ahead, but momentum stalled on Monday as the day closed at $27,470 having peaked at $28,600. Since then, indecision has become the dominant narrative, with BTC trading in a tight band between $27,220 and $27,640.
Regardless of stalling price action, Sunday’s move higher broke above an 11-week downtrend with Bitcoin remaining firmly above this downtrend line. This indicates that the Uptober rally remains valid in spite of BTC’s sputtering price performance this week.
At the time of writing, Bitcoin looks poised to retest the $28,000 resistance mark once again, as the Relative Strength Index, an indicator of market momentum, curls upward for another move toward overbought territory.
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Bitcoin is managing to hold on amid continuing economic uncertainty but stocks have taken a turn for the worse. This has injected further doubt over the short-term direction of crypto markets, given the close correlation between the two.
US Stocks Battered
On Tuesday, US stocks took a hit as the Dow, S&P 500, and Nasdaq declined by 1.3%, 1.4%, and 1.9%, respectively, potentially signaling headwinds for Bitcoin.
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Rick Meckler, partner at Cherry Lane Investments, attributed the stock sell-off to the growing realization of the Fed’s “higher rates for longer” rhetoric, stoking fears over the tightening effect of that across the economy, particularly in respect of the already beleaguered property market.
The next Federal Open Market Committee (FOMC) will conclude on November 2. At present, the probability of the Fed keeping US rates paused at 5.25%-5.5% is 71%.
On the Flipside
- Data on Bitcoin’s performance during a major recession does not exist, making price predictions using historical occurrences tricky.
- The correlation between Bitcoin and the Nasdaq hit a three-year low in June, supporting the thesis on crypto and equities decoupling.
Why This Matters
Uptober’s stuttering run has led to a general sense of uncertainty and doubt creeping back into the crypto market. Bitcoin sentiment is on a knife’s edge with no clear direction either way. However, the foundations of the recent rally remain intact for now.
Learn more about Bitcoin’s stuttering October performance here:
Bitcoin Sheds Early October Gains: Is $30K Still in Play?
Find out more on the allegations levied against Cardano whales here:
Cardano’s Project Catalyst Sweeps Away Rigged Funding Claims
