Bitcoin has a fraught macro week ahead as the BTC price chart fails to turn old resistances into bull market support.
Bitcoin BTC enters the US Presidential Election week with $68,948 down from new heights as it contests for $69,000 price gains and a new record.
- A broader order book and increasing liquidity define the beginning of what will probably be a surprising week for Bitcoin trading.
- The election is scheduled to occur on the 3rd of November, and what comes after the event? A “sell the news” opportunity of course.
- The Federal Reserve interest rate decision will be out in two days, which will be a provoker of crypto volatility.
- Bitcoin market cap dominance is the highest it has been in three and a half years since a key monthly close.
- Network fundamentals of Bitcoin are expected to register a new high, all around this week.
BTC price struggles with old resistance
Bitcoin left the bulls hanging over the weekend extending a downturn from last week’s high tapping $73,500 of long liquidations.
The wick below $67,500 visible on Cointelegraph Markets Pro and TradingView maps a weak weekend attempt from BTC/USD to stage a relief rally.
Now, with the US Presidential Election due, nothing less than turbulence is expected on the global markets.
“As of now, there are still only two distinct market liquidities & order book depths that stand out”, part of the latest update from popular trader Skew.
“$67K – $65K: Bid liquidity & bid depth $73K +: ask liquidity & ask depth.
Adjustments towards the low or high that has been marked in the past week could occur with short notice, based on Skew.
“In coming days it will be very important how this market trades especially around areas of market liquidity,” he concluded.
“Not that difficult to move the price & Volatility within the range of $66K and $73K, considering the order book.”
Some gazed upon what could emerge subsequently, with credible frothy crypto traders and analysts estimating that an extra tap of all-time high values might be coming before a deeper BTC price dump.
“Much lower timeframes still showing very constructive picture here – $BTC seems to be making a base for that towards ATH here,” he shared with X followers.
Using the monitoring resource CoinGlass, it is observed that order book bid liquidity stacking goes up to 67500 into the new week.
Interchangeable resistance levels set since 2021, characterized by $69,000, are, therefore, still feasible.
Election sparks Bitcoin “sell the news” warning
Get ready for the 2024 US Presidential Election; however, as with the previous one, regardless of the outcome for crypto and other risk assets, the show is just beginning.
Prices will swing in the market in the next few days as the volatility kicks in up and down, it seems.
While Bitcoin provided holders a glimpse of what may be forthcoming over the weekend, Skew argued that it was similar to past build-up to macro events.
“Here, decay well positioned & temporary hedges scaling into the US election,” he told X followers while explaining perpetual swaps.
“Overweight positions & hedged markets are something to look forward to in terms of the next aggressive move. Market chases liquidity in large events.”
In another post, Skew pointed out that bitcoin markets appeared to be ‘more healthy’ during the journey to near all-time low than what was seen last week.
“Probably a taker dominated market till post-US election results,” he furiously added.
“Barely better market quoting for the front end for trading pre- early week expiry, need to see spot premiums repeat and persistent spot bid to sustain price.”
There was also bad news for short-term speculators on BTC from the trading firm QCP Capital. In its latest weekly bulletin for subscribers to its Telegram channel, it said it expected a selloff after the November 5 election.
“As for election odds over the weekend, the statement said, note that bets on Trump have dropped from 66 percent on Polymarket to between 57 percent for Trump and 43 percent for Harris in more recent days.”
“In any case, we expect the Elections will be another sell-the-news event similar to the Nashville Bitcoin conference.”
FOMC meeting comes at a key moment for DXY
Besides the election, this week hosts another key macroeconomic date in crypto traders’ diaries: the Federal Reserve interest rates decision.
There will be more evidence of how the Fed will balance those inflationary forces at the next FOMC meeting on November 7th.
As Cointelegraph highlighted these have come in the form of overshoots in inflation gauges alongside lukewarm employment. What is more, nonfarm payroll numbers for the previous two months far exceeded expectations, while the numbers themselves were greatly revised downwards only a week ago.
“The Fed has made it emphatic that continued fortifying of labor market outcomes is considered sacrosanct relative to reining in inflation,” Mosaic Asset was quoting in the current newsletter “The Market Mosaic”, dated November 3rd.
From CME Group’s FedWatch Tool, markets’ odds for a 0.25% rate cut after the FOMC meeting are corroborated by CME Group.
As risk assets were expected to be choppy for the week, Mosaic turned to the VIX volatility index and the US Dollar Index (DXY).
“The response to elections may catalyze a breakout or breakdown in DXY,” it concluded.
“If the dollar is reversing lower at resistance here I believe is supportive of risk assets in the near term.”
At the time of writing, the DXY was 103.82, struggling to cling to a recovery that began in earnest in October.
Bitcoin dominance hits classic reversal zone
The percentage of bitcoin in the overall market capitalization of all cryptocurrencies has recently reached an important figure — and has stabilized there.
Market dominance of Bitcoin was at 60% for the first time since April 2021 on October 29.
Its performance has not been overlooked since traders know well that when Bitcoin rises, the altcoins lag — until the cycle is flipped.
“Bitcoin Dominance is right now at about 60.51% which puts $BTC in the 68k–70k range let alts dump 20-40% from the recent high,” he said in an X post on the topic on Nov. 4.
“This trend fits the pattern seen in bull runs, where an increase in BTC:D will often drag alt-coins down. In my practical work, I found out that a rejection zone between 64% – 65.81% could probably ignite the altcoin’s rally while BTC sets new record highs and trades in a range.”
One popular commentator, MartyParty, tweeted that Bitcoin’s dominance was overdue to fall during a halving year similar to prior years. One chart that was uploaded to X was capable of calculating that after 224 days of each halving event dominance started to fall.
During the following debate, counterarguments were that spot Bitcoin exchange-traded funds (ETFs) support BTC demand and overall retail investor disinterest in crypto.
As for the dominance, the popular trader and analyst Rekt Capital noted that this currency had shown a significantly bullish monthly closing from the perspective of the macro price analysis.
“That’s a historic Monthly Close for Bitcoin Dominance,” he added on the first day of November.
‘The last time BTC Dominance closed like this in a macro uptrend was early 2019’,” Maziar Moin, co-founder of OculusVR, said on social media. That’s over 5 years ago now.”
Difficulty and hash rate beat records
Bitcoin difficulty is back with headline network fundamentals this week and paying a visit to new all-time highs.
The latest aggregation from mining pool CloverPool, previously known as BTC.com, shows difficulty increasing by 5.1% on its next compelled recalibration on 5th November. This will take it to well over 100 trillion for the first time. The mining difficulty therefore also goes into unknown territory as the Bitcoin mining industry moves out from the most recent hashrate halving.
At the same time, a BTC price indicator tied to mining is enjoying all-time high figures of its own.
This is according to Charles Edwards, the founder of quantitative Bitcoin, and digital asset fund Capriole Investments, The Bitcoin Energy Value chart is set to hit six figures.
“Bitcoin Energy Value, the value of Bitcoin in terms of raw Joules, is at $99k and is approaching $100k for the first time,” he said last week.