After Bitcoin ‘s first monthly closing price exceeded $60,000, a new week and a new month ushered in a turbulent start-what will happen next?
After the much-anticipated October ends, the bulls are looking forward to November to provide the next phase of their hopes—and sometimes promises—that Bitcoin prices will surge like never before.
The forecast is different at different times. The closing price of BTC /USD this month may be close to 100,000 U.S. dollars, but it may also fall to close to 50,000 U.S. dollars.
With everything in progress, with solid buyer support in positions above $50,000, Cointelegraph analyzed the factors that may affect Bitcoin’s price trend in the coming week.
October 2021 becomes Bitcoin’s best month since 2020
Regardless of what happens next, market participants are immersed in celebration this week, as Bitcoin set the highest monthly closing price in history.
Bitcoin’s monthly closing price hits a record high
-Will Clemente (@WClementeIII) November 1, 2021
The target for November is not only US$60,000 but also US$61,000.
However, Bitcoin is by no means “only rising but not falling” in a short period of time. After the close of the market on Sunday, there was a significant downward fluctuation-it fell to 59,500 US dollars, and a few hours later unexpectedly exceeded 62,000 US dollars. .
Perhaps fans of PlanB’s “worst case” price prediction are a bit nervous, which requires a price of at least $63,000 at the end of October.
Although it is still more or less in accordance with the forecast, in order for it to continue to maintain historical accuracy, it needs to reach a price of 98,000 US dollars at the end of the month.
However, for PlanB himself, the results are quite satisfactory.
August 47,000 USD✅
September 43,000 USD✅
The new monthly closing price of $61,000 in October hit a record high! ✅
Okay, 3% rounding error…close enough for me
Next target: November> 98,000 USD, December> 135,000 USD
-PlanB (@100trillionUSD) November 1, 2021
Cointelegraph writer Michaël van de Poppe also added: “Yes, Bitcoin may not close above $63,000 this month.”
“However, PlanB’s S2F model has a much better hit rate than your trading performance, so I won’t really criticize him. $61,000 is also good, close enough.”
After a one-night low point correction, the trading price of BTC/USD was around $62,000. October was Bitcoin’s best month since December 2020, with a return rate of just under 40%.
BTC/USD 1-month candlestick chart (Bitstamp) Source: TradingView
Mining difficulty increased for the 8th time in a row
Those who are looking for a truly “up but not down” mode, only need to look at the fundamentals of the Bitcoin network.
This week, the mining difficulty will be raised for the eighth time in a row-this has never happened since 2018.
Due to the increasingly fierce competition in the mining field, the difficulty of mining has now completely made up for the losses that inevitably caused after China forced miners to stop work in May.
This week, the mining difficulty will increase to 21.89 trillion, which is only 3 trillion lower than the highest level in history.
Computing power-a measure of mining processing power-is similar.
Although it is impossible to “measure” in exact terms, estimates show that computing power is still developing in the direction of historical highs.
The raw data has an upward and downward trend, and different estimates will often give quite different readings. However, the average weekly computing power is now about 159 EH/s-closer than ever to 180 EH/s in April.
Bitcoin’s 7-day average computing power map Source: Blockchain
Long-term holders continue to hold
September provided bitcoin buyers with an opportunity to “buy on dips” in gold, and October is not without a short-term correction.
Did you buy on dips? If you do, you join the ranks of increasingly powerful long-term holders whose beliefs will only increase in October.
As the major exchange Kraken’s research pointed out last week, the rise in the price of Bitcoin and its all-time high of $67,100 failed to attract holders to sell Bitcoin.
The researchers concluded: “It is worth noting that although long-term investors are not worried about last month’s pullback and use it as an opportunity to continue to accumulate, this trend has not changed, although the price rebounded sharply to close to 67,000 US dollars. Record high.”
“In other words, the supply shock that long-term holders bought last month will only become stronger this month.”
They added that these entities, not short-term speculators, are driving price performance in the fourth quarter of this year.
This is consistent with analyst Willy Woo’s previous analysis that the so-called “Last Holder” or “Rick Astley” investors are still committed to their investments. Since 2020, the miners themselves have been among the long-term holders.
Woo pointed out this weekend: “Since 2020, miners have been long-term holders (and buyers) of Bitcoin. This is a huge change in behavior.”
“From 2009 to 2014, there was no continuous accumulation of miners.”
Bitcoin miner supply map source: Kraken
Exchange balance is the lowest since October 2018
On the topic of supply shocks, from the point of view of Bitcoin bears, the situation on exchanges is very serious.
According to the latest data from the on-chain analytics company Glassnode, the exchange’s bitcoin reserves are currently at the lowest level in three years.
At that time, at the end of 2018, Bitcoin was entering the abyss of the previous bear market, and it bottomed out at $3,100 in December.
Since then, price movements have changed by orders of magnitude, but the balance is still declining-all of which indicate that if demand increases significantly from now on, the scale of potential shocks will increase.
The exchange now controls 2.47 million bitcoins, and when it peaked in April 2020, more than 3.1 million bitcoins were on its order book.
Source of exchange bitcoin balance graph: Glassnode/Twitter
Between different exchanges, balance changes may vary greatly. For example, in the past 24 hours, Coinbase Pro led with a reduction of nearly 20,000 Bitcoins, while the balances of some other exchanges increased slightly.
The market expects the Fed to announce a reduction in debt purchases
In the coming week, there may be some familiar trends in the traditional market, and their traditional chain influence on the crypto market.
This may come from the Fed’s latest comments on the management of the new crown virus on Tuesday and Wednesday, and the market expects more clues about reducing asset purchases.
This comes at a time when global inflation is intensifying. Federal Reserve Chairman Jerome Powell has previously admitted that the accompanying supply chain crisis may “continue until next year.”
Kathy Jones, chief fixed-income strategist at Charles Schwab, told Yahoo Finance last week: “I think the Fed is determined to start reducing bond purchases soon. We expect them to announce next week and then start soon, so this is already It’s a certainty.”
He said: “I think the biggest debate right now is how fast the Fed is actually raising interest rates. The market’s expectations have really changed to two rate hikes in 2022 and 2023… This is a pretty positive pace of tightening. .”
These circumstances help increase the attractiveness of Bitcoin as an inherently deflationary asset class with a mathematically verifiable supply cap.
The inflow of institutional funds into existing Bitcoin investment products and the newly launched futures exchange-traded funds (ETFs) have highlighted the growing demand.
Purpose Bitcoin ETF Asset Management Scale vs. BTC/USD Chart Source: Bybt
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