Traditionally, October has been a month characterized by an upward market trend; however, Bitcoin’s recent performance has deviated from this pattern. Over the last week, BTC has seen a significant decline, with the current price standing at $61,436.
This represents a 6.31% decrease over the week.
While there was a slight recovery in the past 24 hours, with a 0.92% increase in the BTC price, the overall monthly trend shows an 8.18% uptick.
The lack of a clearly defined price trajectory has left the cryptocurrency community speculating. Analysts, including the renowned crypto expert Rekt Capital, have suggested that BTC might be heading for a further downward spiral.
Evaluating Market Sentiment
Rekt Capital’s analysis indicates that Bitcoin is consistently being rebuffed by the PI Cycle MA.
As per this assessment, as long as the PI Cycle MA continues to act as a barrier, BTC is likely to continue its downward trajectory. The downtrend will be confirmed if it touches the light blue downtrend line, particularly with the persistent current pattern.
However, the analyst also pointed out that buyers are beginning to accumulate despite the declining prices. Evidence of this is seen in the formation of a 4-hour bullish divergence in BTC.
Repeated rejections at this level demonstrate the buyers’ struggle to drive prices beyond the resistance.
Each rejection further builds bearish pressure, indicating that Bitcoin is currently hindered by a supply obstacle that is impeding its momentum.
Hence, if the prevailing market sentiment remains unchanged, BTC is likely to witness further negative movements on its price charts.
Interpreting BTC Charts
While the aforementioned analysis paints a bearish picture for Bitcoin, it is crucial to consider insights from other market indicators.
Firstly, Bitcoin’s exchange supply ratio has surged in recent days, escalating from 0.1304 to 0.131.
This increase in the exchange supply indicates that investors are depositing their assets into exchanges to facilitate selling. Such behavior typically exerts downward pressure on prices, especially if selling intensifies.
Furthermore, Bitcoin’s MVRV Long/Short difference has declined over the past week, dropping from 4.3% to 3.2%.
This downtrend signals a decrease in confidence among long-term holders as their profit margins shrink. It reflects a bearish sentiment, as long-term holders are becoming less inclined to maintain their positions.
In addition, the diminishing Open Interest (OI) per exchange underscores investors’ declining confidence. OI has decreased from $6.1 billion to $5.2 billion, indicating that investors are closing existing positions without initiating new ones.
In essence, the prevailing market sentiment leans towards bearishness.
Therefore, should these conditions persist, Bitcoin is projected to find support near the $58,272 resistance level. A reversal of the trend would see BTC aiming to reclaim the $62,700 mark.