The ongoing banking crisis has induced a lot of uncertainty in the financial markets around the world. The signs of a market recession continue to pop from the developed markets, including the United States. With the fear of more bank runs, confidence in Bitcoin, among other risky assets, has significantly spiked in the recent past.
Moreover, Bitcoin price has printed its largest weekly gain amidst the banking crisis. Additionally, United States federal officials are exploring ways to allow the FDIC to temporarily insure deposits beyond the current $250,000 cap on most accounts without having to get approval from Congress.
With the risk of hyperinflation similar to Venezuela, Sri Lanka, and Argentina, among other nations, the value of Bitcoin is expected to skyrocket in the coming years. Furthermore, mainstream adoption is expected to kickstart the next parabolic crypto bull run.
Uncertainty from the Elite
The Fed monetary policy statement on interest rates is expected to be released tomorrow, as economists argue whether the Fed should pause or drop the rate to bolster the financial crisis. Accor to billionaire Bill Ackman, the Fed should pause the interest rate hikes or decline during tomorrow’s FOMC statement.
“I continue to believe that the best course of action is a temporary FDIC deposit guarantee until an updated insurance regime is introduced, for if bank number five is closed, the market’s attention will move to banks six, seven, and eight,” Ackman noted.
His argument was, however, countered by Peter Schiff, who noted a pause would be catastrophic for the dollar.
As such, Elon Musk noted that the Fed should drop the interest rate by at least 50 bps to save the economy.
Bitcoin has been on a roller-coaster ride in the last 24 hours, nearly losing the $18,000 mark and now approaching the pivotal $20,000 level. While market participants believe the bullish Uptober rally will continue, the possibility of a bull trap haunts the price rally, mainly because some metrics have been showing levels that are typical.
As a result, it is now possible to predict that the price of BTC may sharply decline after a brief uptick.
In an intriguing update, one of the crypto trading platforms, Skew, shared metrics comparing the Binance open interest and the price. As the BTC price surged, the shorts were equally blown up. Hence, responding to the post, one of the well-known analysts, Capo, who has been bearish on Bitcoin for quite a long time, confirms a short squeeze.
Despite the sharp upswing in the BTC price, the asset remains squeezed at the same levels, as the Bollinger bands continue to squeeze tighter. Therefore, indicating that a notable move is yet to come ahead.
As seen in the above chart, the Bollinger bands continue to squeeze ever since the beginning of the month. On the other hand, the Bollinger bandwidth (BBW) which offers an easy way to visualize consolidation has dropped extremely lower. This indicates that volatility is very low and hence may be due to sudden price action, regardless of the direction.
Collectively, Bitcoin’s (BTC) price appears to be bullish but may also carry the possibility of a short-term bounce, that may trap the bulls.
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There was a strong bearish sentiment that grew throughout September and Bitcoin’s price has had a difficult time sustaining itself above the $20,000 psychological support level.
All eyes are looking for greener price charts for the leading cryptos in the final three months because Ether (ETH) and the majority of altcoins are in the red or on a range bound trend.
Technical indicators have provided a signal about what to expect in October despite the extreme volatility in the cryptocurrency market, here are few of them.
There was a decrease in blockchain demand and the entire cost of using a blockchain shows both the demand for and willingness to pay for it. Just under $30 million was generated by Bitcoin network fees over the past quarter, down from $42.9 million in Q2 2022.
Ethereum fees, on the other hand, fell even further, from $1.29 billion in Q2 to $264 million in Q3, representing a 79% quarter-over-quarter decline (q-o-q).
Net flows also showed that, in contrast to BTC, where mood was neutral, ETH had a more positive position. Over the $192 million in net outflows from Q2, Bitcoin saw small inflows of under $50 million into controlled exchanges. For the fourth consecutive quarter, over $1 billion worth of Ether (ETH) departed exchanges, while Q3 outflows were $57 million lower than Q2’s.
BTC bulls may not visit soon
A major price increase looks far away without a good pump from whales and retailers. Whale metrics from Santiment showed that, as of press time, there was neither significant whale accumulation nor large utility in BTC.
BTC whales with between 100 and 10,000 BTC in their possession are still dumping. 3.5% of the supply at these important addresses has been transferred to addresses with less bearing on future price changes throughout the course of the past year.
Another 0.4% of BTC’s supply was disposed of just in September. An important pattern to look out for in October is would-be whale accumulation.
Another troubling indicator that emerged from a check at BTC financing rates is that traders are gradually longing more and more when the price doesn’t fall.
Once the longs are sufficiently elevated, another dump occurs, traders briefly try to short, but eventually give up and start to long once more.
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Shiba Inu (SHIB) Price Heads Toward New Heights, Here’s Why Caution Is Necessary – Coinpedia – Fintech & Cryptocurreny News Media
The crypto market is reflecting positive momentum for the day but is still trading below $1 trillion, positioned at $995.40 billion with a surge of 1.91% in the last 24hrs.
In addition to this, the major cryptocurrencies are still below their crucial price level. However, the SHIB coin is currently experiencing a massive bull run- quite in contrast to the global crypto space.
Although the bears are currently displaying dominance, the meme currency has witnessed a jump of 7% over the span of seven days. Additionally, Whalestats took to Twitter to say that SHIB is currently the top currency for the top 500 ETH whales holding the tokens.
A Surge In Social Dominance
Several factors have fueled the price rally and as per analytic firm, LunarCrush, Shiba Inu has gained 8.03% in terms of social mentions along with a 10.37% increase in social engagement. Hence, the overall social media sentiment appears to be positive. The chart below depicts the social dominance volatility.
In addition to all this, on September 5, the Shibburn revealed that nearly 51 million SHIB tokens have been burnt. So with an increased burning rate, the meme currency might see increased demand and value.
However, although there is an increase in social media engagement, Shiba Inu’s volume has not seen any surge; it has been constant for the last two weeks.
The circulating market cap has dropped by 18.50% in the last two weeks.
Although the market sentiment is positive around the meme-coin, it’s important to remember that it’s always risky to trade in volatile currencies.
Thus, Coinpedia readers are recommended to exercise caution while investing/trading.