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As November begins, analysts are busy analyzing the major market movements that occurred in October. Bitcoin (Bitcoin) remained relatively unchanged, growing just 5.89% in October. Vetle Lunde, Senior Analyst, Arcane Research Planned The direction the market will take in the coming months.
Uptober, a reference to Bitcoins bullish past performance in October, was a common theme in many threads on Crypto Twitter, and according to Lunde, it appears that this performance has happened again. Data shows that BTC and exchange tokens outperformed the large-cap index until his October 26th.
Elon Musk’s Twitter takeover has pushed the Large Cap Index above Bitcoin, resulting in a staggering 20% monthly gain. Dogecoin (Doge) has risen 144% over the past seven days, helping to solidify the strength of large-cap stocks.
The Bitcoin spot market in October benefited from a short squeeze that temporarily revitalized the market, while being driven by higher trading volumes and lower volatility. According to Lunde, the last week of October saw the highest volume of short cryptocurrency sales since July 26, 2021.
This activity helped push Bitcoin up 6%, but Ether (ethereum) and BNB (BNB) showed significant increases of 18% and 19%, respectively.
While the short squeeze helped push the overall boost, Lunde concluded that the momentum didn’t bring much change to the BTC price. The index is at its lowest level in two years. Moreover, the 7-day volatility index is 2.2% for him, while the annual average is 3% for him.
Comparing the volatility of previous short squeezes to recent short squeezes, Lunde said:
During the July 26 squeeze, the daily high and low volatility was 15% as the market rushed higher, while the October 25 and October 26 moves showed the daily high and low volatility. were 5% and 6%, respectively.In addition, the momentum has stalled, indicating that traders should prepare for a longer consolidation.
Bitcoin’s price is attractive, Runde said, but the best approach to this market is to take dollar-cost averaging in the short term rather than using leverage. Bitcoin has experienced very low volatility and follows the U.S. stock market closely, so it’s important to track the third quarter earnings report.
Federal Reserve Chairman Jerome Powell is set to speak on US monetary policy, inflation and upcoming rate hikes after the Federal Open Market Committee meeting on November 2nd.
According to Lunde, there are two scenarios to watch out for.
Scenario 1: Jerome Powell remains sharp in his fight against inflation and prepares the market for further rate hikes. This is, in my opinion, the most plausible scenario. We expect the correlation with asset classes to continue to rise, the current 4.5 month trading range to remain solid, and activity to remain subdued, prolonging an opportunistic environment for stacking the SAT.”
Scenario 2: Jerome Powell offers a subtle pivot tip. In this scenario, we see correlative market conditions softening. , saw how the significant short squeeze reduced the correlation, leading the pivot forecast, showing a similar response and revitalizing BTC’s digital gold narrative.”
In the second scenario, some analysts believe cryptocurrencies could begin to decouple from U.S. equities.This reaction may reflect the crypto market reaction in mid-2020 Bitcoin price surpasses $20,000.
Longer term, Lunde predicts that adoption of Bitcoin and digital assets will continue to be the new trend. Lunde remains bullish on BTC at current prices, pointing to a Fidelity survey that showed increased interest from institutional markets in 2022.
I don’t see bitcoin on-chain transaction, increased participation from a clearer regulatory framework is possible in the long term. A clearer framework may emerge eventually. US Voters Begin Consideration Crypto policy when voting.
Bitcoin’s slowing growth, correlation with equities, and nearly a year of persistent downtrend remain threats, but many analysts believe Bitcoin’s current price is undervalued.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading movements involve risk. You should do your own research when making a decision.
