The price of 1 btc to usd as of October 23, 2023, was trading at $28,300. This week’s price action is expected to range between $26,500 and $30,000 (with a 68% likelihood). The Federal Reserve’s interest rate decision, the Bitcoin spot ETF approval process, and irregular on-chain data movements are the main determining factors. According to CoinGlass statistics, the Monday average volatility range of Bitcoin over the past five weeks has been ±3.5% (approximately ±990 US dollars), and Wednesday is usually the most volatile (±4.2%) when the Federal Reserve meeting minutes are announced. Technically, the daily RSI of Bitcoin is 52 (neutral), and the 4-hour MACD is turning around the zero axis. If it breaks through $28,500 (September high), it may trigger the liquidation of $380 million worth of short contracts, with the target as high as $30,000. If it goes below $27,000 (50-day moving average), or drops to $26,200 (50% Fibonacci retracement level).
On-chain data is indicating near-term risks. The “whale” whale address holding more than 1,000 BTC has net transferred 4,200 BTC (approximately 119 million US dollars) to the exchange in the past three days, with the selling pressure reaching the 90th percentile of the year (Glassnode). The exchange reserves had hit 12.3% of the circulating supply (the year-to-date high), and miners’ daily selling volume hit 600 BTC (around 16.98 million US dollars), a 25% increase from last week (Cambridge University Mining Data Centre). Signal differentiation of derivatives market: Deribit Bitcoin options’ implied volatility rose to 65% (30-day average 50%), and the call options’ outstanding amount with an exercise price of $30,000 reached 42,000 BTC (nominal value $1.19 billion), yet the perpetual contracts’ funding rate turned negative (-0.02%), indicating that leveraged long positions were overheated. If the price falls below $27,500, it may trigger a long margin call of $650 million.
The overall trend of macroeconomic events. The Federal Reserve’s interest rate decision on November 1st (18% probability of a 25 basis point increase), if the interest rate is kept constant, risk assets can surge by 3% to 5%. If hawkish signals are sent (such as proposing another interest rate hike for the year), Bitcoin can fall to $26,000. The back data shows that the average price action of Bitcoin on the day of the interest rate decision was ±5.8% (data from 2023). Additionally, if the preliminary reading of the US Q3 GDP (expected growth of 4.3%) is more positive than expected, it may push the US dollar index above 107 and suppress the upward movement of 1 btc to usd.
Regulatory progress has become a major unknown. The final approval result of BlackRock’s Bitcoin Spot ETF will probably be announced this week (with 70% probability of approval). If approved, as per the estimation of the Gray-scale model, the net inflow of funds during the first week can be 1.5 billion US dollars, which will push the price above 30,000 US dollars. If postponed, the price can go down again to the support level of $27,000. When BlackRock first submitted an ETF application back in June 2023, Bitcoin surged by 19.6% within a day (from $25,200 to $30,100), but after the SEC postponed its verdict in August, the price fell back by 14%.
Market sentiment and capital flow. The Fear and Greed Index of digital currencies is 55 (neutral) currently, but the volume of outstanding Bitcoin futures contracts has reached 15 billion US dollars (this year’s high), with a 1.2:1 long-short position ratio, indicating the dominance of bullish sentiment. Net inflows of institutional funds were 94 million US dollars last week, 85% of which were invested in Bitcoin products, per CoinShares’ report. If the ETF is accepted, retail investors’ FOMO sentiment can drive the one-day rally of 1 btc to usd by more than 10% (refer to the 6.7% rally of BTC on the first day of the listing of ProShares Bitcoin Futures ETF in Oct 2021).
Operation suggestions:
Breakthrough strategy: Long position can be taken lightly above $28,500 with a target of $29,800 and a stop-loss at $27,900 (risk-reward ratio 1:3).
Event hedging: Buy a November $27,000 put option (with premium around 4% of the position) to lock in downside risk;
Conservative wait-and-see: Get into the market after the Federal Reserve decision. If the price is below $26,500, build positions in batches (add 10% every $500 drop).
Risk Alert: During the “Black Thursday” of March 2020, the evaporation of Bitcoin liquidity made the exchange spread expand to 20%. When the black swan events (e.g., hacking attacks on exchanges) reoccur this week, 1 btc to usd can drop by 15%-20% right away. It is recommended to use limit orders and diversify exchange platforms (e.g., Coinbase+ Binance) to avoid extreme risks.
