Bitcoin has kicked off its “Uptober” trend, with prices steadily increasing since the start of the month. Following a difficult September, investors capitalized on the positive sentiment in October to buy during price dips, driving the price upwards. However, short-term holders (STHs) have been selling near local highs, creating strong resistance around the $68,000 level, potentially leading to further price corrections.
Bitcoin Aims for Painful Price Dip
Bitcoin’s weekly gains of 11% have some traders worried that the market could experience another price drop before continuing its ascent to new all-time highs. The recent surge in Bitcoin’s volatility suggests that risk protection is becoming more expensive, and leveraging trading is becoming costlier as volatility increases.
Even traders using high leverage, such as 50x, who bought at the peak have not been forced to sell yet, with prices consolidating below $68K. Data from IntoTheBlock indicates that about 5% of the circulating Bitcoin supply is currently at a loss, while the remaining 95% is in profit. This suggests that there may be selling pressure from profitable holders choosing to cash out as the market rises.
As Bitcoin struggles to maintain levels above $68K, we may witness heightened selling pressure in the coming hours as short-term holders continue to take profits during minor price spikes.
Realized profits have surged over the past week, signaling that some investors are taking gains. Glassnode reports that over $11 billion in profits have been realized in just over a week, with $5.6 billion on October 8 alone, marking the largest profit-taking day since May 28.
Interestingly, the upward momentum followed increased institutional demand this week, particularly in US-listed spot Bitcoin ETFs. Coinglass data reveals that these ETFs saw inflows for three consecutive days, totaling $1.38 billion from Monday to Wednesday, with $456.90 million on Wednesday alone.
What’s Next for BTC Price?
Bitcoin has managed to hold above the crucial $66K resistance channel as buyers gain confidence. However, sellers are also defending immediate resistance levels around the 23.6% Fibonacci level at $68K. Currently, BTC price trades at $67,083, declining over 1.2% in the last 24 hours.
The key support level to monitor is $65,000. If buyers can establish this level as support, the price could rally to $70,000, although sellers are likely to strongly resist the $70,000 to $73,777 range.
A break and close below $65,000 would indicate weakness, potentially leading to a drop to the ascending trend line at $62K. If the price rebounds from the 50-day EMA, bulls may attempt another push towards $70,000.
However, a breach below $62K would signal a loss of momentum for the bulls, potentially resulting in a further decline to the 50-day simple moving average at $60,987.
Overall, Bitcoin’s price trajectory remains uncertain as it navigates the current resistance levels and market dynamics. Investors should closely monitor key support and resistance levels to make informed trading decisions.