Bitcoin’s price has remained stuck in a narrow trading range throughout October, fluctuating between $60,000 and $64,000. While it has consistently held above the $60,000 support level, multiple attempts to break the $64,000 resistance have failed, leaving the market in a state of indecision.
Geopolitical Risks Weigh on Bitcoin’s Upside
One of the key factors contributing to Bitcoin’s stagnation is the prevailing economic uncertainty and escalating geopolitical tensions. Investors are cautiously awaiting key US economic data, including the Federal Reserve’s minutes from its latest policy meeting and upcoming inflation data. Market participants are anticipating a 25 basis point interest rate cut, which is typically bullish for Bitcoin. However, ongoing geopolitical conflicts, particularly in the Middle East, are driving investors toward safer assets like the US dollar.
The dollar index has climbed to its highest levels in nearly a month, further weakening Bitcoin’s momentum as it consolidates within the $60,000-64,000 range.
Low Sell-Side Activity Keeps Bitcoin Range-Bound
Bitcoin’s stagnant price can also be attributed to minimal sell-side activity, as indicated by the Sell-Side Risk Ratio. This metric measures the profit or loss realized by investors relative to Bitcoin’s Realised Cap. A lower ratio, which is currently observed, suggests that coins are being sold close to the investors’ break-even point, with little profit or loss being realized. This lack of decisive action is keeping Bitcoin’s price flat and range-bound.
Neutral Momentum and Potential Downside
Technically, Bitcoin’s price action is forming a rising wedge pattern, characterized by ascending trendlines that converge at an apex of around $69,750. Meanwhile, the Relative Strength Index (RSI) hovers around the neutral 50 level, indicating balanced sentiment between buyers and sellers.
Rising wedge patterns are typically bearish, with a breakdown likely to occur if Bitcoin falls below the lower trendline. Should this happen, Bitcoin risks dropping to the $49,700-56,000 range by the end of 2024.
For now, traders remain cautious, with neutral momentum reflecting a conflict in market sentiment.
