(Kitco News) – It was a rough start to the week for financial markets as stock prices declined and Bitcoin (BTC) ran into a wall of bearish resistance at $69,500 amid a spike in the U.S. 10-year Treasury yield, which climbed 10 basis points to 4.19%, its highest level since July.
While the S&P has seen an impressive weekly win streak, “The sustainability of these gains hinges on corporate earnings, with a critical week ahead as approximately 20% of S&P 500 firms prepare to report, including Tesla's anticipated earnings on Wednesday post-market,” noted analysts at Secure Digital Markets.
More than 100 companies in the S&P are scheduled to report earnings this week, but investors don’t anticipate many shocks that could lead to further declines as roughly 80% of the Q3 updates from companies on the index thus far have performed better than expected.
But with both Treasury yields and the DXY gaining on Monday, the major indices faced pressure, with the S&P and Dow finishing the day down 0.18% and 0.80%, respectively, while the Nasdaq managed to claw its way into the green and finished up 0.27%.
“Bitcoin has dipped more than 3% since Sunday, with corresponding declines in open interest and spot volume,” said Secure Digital Market analysts. “Notably, there's now a premium on BTC and ETH perpetual contracts, signaling a shift from spot transactions to futures trading—a move typically associated with speculative activity. This trend towards leveraging futures might amplify market volatility due to the increased risk appetite.”
“Despite the morning's downtick, the bullish sentiment of ‘Uptober’ holds firm,” they added. “Following a recent rate cut by China's central bank, aimed at stimulating economic growth, and with U.S. equities hovering near record highs, the risk-on mood appears poised to strengthen further as the U.S. elections draw near.”
“Market participants are closely watching the U.S. elections, anticipating that a win for Donald Trump could usher in favorable crypto regulatory reforms,” the analysts noted. “Current betting odds from Polymarket show a 62% likelihood of a Trump victory.”
Data provided by TradingView shows that after Bitcoin hit a high of $69,500 in the early hours on Monday, bears took control of the price action and pounded it to a daily low of $66,796 before dip buyers stepped in to push it back above $67,500.
BTC/USD Chart by TradingView
At the time of writing, BTC trades at $67,748, a decline of 1.50% on the 24-hour chart.
Spot gold, meanwhile, rallied to a new all-time high above $2,740 in morning trading but has since given back those gains and currently trades at $2,718.90 per ounce for a decline of 0.07% on the session.
Bull market to heat up into 2025
Despite the weakness in Bitcoin to start the week, analysts widely expect its price to trend higher in the near term as tailwinds continue to mount.
“The recent strengthening of Donald Trump’s position just two weeks before the elections is positively impacting Bitcoin's price, with expectations that Bitcoin will surpass the significant psychological threshold of $70,000 by Friday,” said Maria Carola, CEO of StealthEX. “However, the likelihood of reaching a new all-time high (ATH) this week remains low.”
“Geopolitical factors, such as the U.S. elections, the conflict in the Middle East, and evolving global regulations surrounding stablecoins, have the potential to introduce an unexpected market event (a ‘black swan’) of considerable scale to the cryptocurrency market even before the holiday season,” she added. “In November, Bitcoin will likely surpass ATH, initiating a steady growth towards the next major milestone of $100,000 per coin.”
“On the technical front, Bitcoin's hash rate has breached 700 EH/s for the first time, with hash prices hitting a two-month peak of $50 PH/s amid rising mining profitability, spurred by increased transaction fees and a buoyant BTC price,” noted analysts at Secure Digital Markets. “In regulatory news, the SEC has approved options trading for spot BTC ETFs on the NYSE, with a similar nod for Nasdaq, though launch dates remain unspecified.”
“ETF activity has seen significant movements: BTC ETFs have attracted $273.7 million in inflows, predominantly from Ark, while ETH inflows lag at $1.9 million,” they added. “Blackrock's IBIT ETF stands out, pulling in over $1.1 billion last week—its strongest showing since March and placing it third in year-to-date inflows among ETFs.”
MN Consultancy founder Michaël van de Poppe said that whether Bitcoin hits a new all-time high this month or next, “the bull market is here,” and this morning’s push towards $70,000 was an attempt to start attacking the liquidity above the resistance level.
#Bitcoin is attacking the $70K barrier and aims for the subsequent liquidity to be taken.
I think we're on the edge of making a new ATH.
Whether it's this month or next month, I don't know, but the bull market is here.
If this scenario happens, then I'm buying the dip. pic.twitter.com/Evcty6xraI— Michaël van de Poppe (@CryptoMichNL) October 21, 2024
“Even though #Bitcoin is ranging around the ATH's, the activity on whales is increasing and they are buying more,” he added in a follow-up post and included the chart below from CryptoQuant showing a spike in whale activity.
“In essence: that's a great sign for #Bitcoin, but a terrible sign for the global economy,” Poppe said. “What can we expect? I think we'll see #Bitcoin run to $300-500K.”
And according to TradingView analyst Alan Santana, a potential rally to $300k in this cycle could start with a surge to $130k by early 2025 as the post-halving bull market starts to heat up.
“Bitcoin To $130,000 By January 2025?” Santana asked in his latest update. “Not $130,000, but actually much higher, [I] think more of a price number around $155,000 or even $180,000 - $200,000 if inflation gets out of control, the only part that needs adjustment is the date.”
“Bitcoin is not set to grow, Bitcoin is growing and has been growing long-term,” he added. “This is something that I cannot argue with and something nobody can or wants to argue with, we all agree. Bitcoin is going up.”
“In 2025, we are not expecting such small targets as $100,000 and $130,000, these are fairly easy numbers and most likely the first major milestones to be hit once the bullish action intensifies around or after March 2025,” Santana said. “The mistake would be to think that this type of level can be hit now, in October, November, or even December 2024.”
As Monday’s pullback shows, “Bitcoin is still on the path to test the 200MA as support, and with the crash wick, there you have the levels that will activate the major bull market,” he warned.
BTC/USD 1-week chart by TradingView
As far as what to expect as the bull market unfolds, Santana said he expects “The top will most likely be a blow-off top. This means that there won't be a long-term double-top as in 2021. Think more of December 2017. This is based on the law of alternation as known from the Elliot Wave principle and also based on past history. So this can make the next bull-market dynamics quite interesting.”
He provided two potential scenarios on how it will play out.
First, “A blow-off stop means one peak and then the start of the next bear market,” he said. “If the action starts early, this top can be reached within 5-6 months and thus the end of the bull market for Bitcoin around April-May-June and then long-term bearish action. Possible but not likely.”
The second scenario, which he sees as more likely, is “A blow-off top late in 2025.”
“This is more likely since Bitcoin tends to peak, always, late in the bull-market year,” Santana said. “This is to give time for the rest of the market to do its thing. Thinking of this, we would have plenty of time for the bullish wave to develop, and this would require many months of rising prices, think of a repeat of 2023.”
“Think of Bitcoin going full green to new ATH late Q1 2025,” he said. “Then a small correction, sideways for months, and more higher prices. We can see 3-7 months of consolidation before the final bull run. The final bull run would produce a new All-Time High with a blow-off top varying between $155,000, conservative, and up to $180,000 - $208,000 (inflation/war scenario). This is more in tune with how Bitcoin behaved in the past.”
As for how traders should play it, Santana said to “LONG Bitcoin after the correction ends. We continue to see lower highs, and we are set to experience a lower low next.”
“See 200MA on this chart, Bitcoin can produce a strong wick below this level, and this would be the long-term correction bottom,” he concluded. “After this bottom, we grow again.”
Altcoins follow Bitcoin’s lead lower
The majority of tokens in the top 200 recorded losses following Bitcoin’s pullback as traders remain cautious to go full risk-on until a clear breakout for BTC transpires.
Daily cryptocurrency market performance. Source: Coin360
Amp (AMP) was the biggest gainer on the day with an increase of 9.8%, followed by gains of 9% and 8.7% for Raydium (RAY) and cat in a dogs world (MEW). First Neiro on Ethereum (NEIRO) was the biggest loser, falling 8.4%, while Blur (BLUR) lost 7.4%, and Echelon Prime (PRIME) fell 7%.
The overall cryptocurrency market cap now stands at $2.34 trillion, and Bitcoin’s dominance rate is 57.1%.
