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US election nerves in an otherwise quiet week.
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BTC ETF inflows point to confidence in Bitcoin’s price.
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Can Uptober continue?
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Bitcoin technical outlook.
Bitcoin faced rejection at the key 70k psychological level on Monday, correcting lower. However, institutional investors continue to buy the dips with strong spot Bitcoin ETF inflows. There are few catalysts for crypto traders to sink their teeth into this week; Bitcoin price action could struggle for direction.
US election nerves in an otherwise quiet week
Rising expectations that Trump could win the US Presidential election boosted Bitcoin the previous week, as the former President’s odds of winning jumped to 60% in the Polymarket. However, with just two weeks to go to the US elections, there is a more cautious mood to risk sentiment across the markets. US equities have fallen away from multiple record highs reached last week, and Bitcoin has eased back from a three-month high and the key 70k level.
Despite this week’s cautious mood, options traders expect the election outcome to be bullish. The implied volatility for Bitcoin options coming due around election day is elevated and skewed to the buy side. Options traders increasingly bet that Bitcoin will reach record highs no matter who wins on November 5th. Given that both candidates are expected to increase US debt levels, perhaps this isn’t so surprising.
BTC ETF inflows point to confidence in Bitcoin’s price
Similar bullish optimism can be seen among institutional investors, who bought the dip even as the price fell at the start of the week. According to SoSoValue data, spot Bitcoin ETFs saw net inflows of $297.6 million on Monday, even as the Bitcoin price fell 2.5%. This marked the seventh straight daily increase in spot Bitcoin ETF inflows. US spot Bitcoin ETFs rose $2.13 billion across last week, an 11.3% increase.
This level of interest from institutional investors is a strong indicator of confidence in Bitcoin's price prospects. As more capital flows into these ETFs, it provides upward momentum to Bitcoin's price, encouraging retail and institutional investors to join the rally.
Can uptober continue?
Bitcoin has risen 6% so far in October, a historically bullish month for the token, and investors are weighing up whether it has the potential to rise further towards fresh record highs. While numerous tailwinds support the price, and a pullback is normal bull market behavior, a strong USD could provide a headwind to further gains.
The USD breached 104 against its major peers, rising to a fresh 2.5-month high, and has booked 3.2% gains this month. Until now, USD strength hasn’t quashed enthusiasm for Bitcoin; continued USD strength could pose a risk to Bitcoin's extending gains further.
Bitcoin technical outlook
BTC/USD is attempting to break out of the falling channel within which it has traded since mid-March. After rising above the upper band of the falling channel at 67.5k, the price ran into resistance at 69.5k. The price has since corrected lower and is testing 66.5k support, the September high.
Buyers will be looking for a rise above 70k to confirm the breakout and form a higher high towards 73,750 and fresh all-time highs.
However, a move back below 66.5k could prompt a deeper retracement towards the 200 SMA ahead of 60k.
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