Bitcoin Price Wobbles in Spooky Season as Correction Looms

The Bitcoin price hits a spooky season stutter as analysts warn of correction just as China’s Golden Week holiday kicks off on October 1.

This annual seven-day event, marking China’s National Day and celebrated with cultural festivities, often leads to reduced trading activities worldwide, affecting even the cryptocurrency market. Consequently, Chinese traders and businesses typically take a break, leading to lower market participation.

Bitcoin Faces Potential Correction

Analysts have forecasted a sluggish week in the market, predicting that Bitcoin might experience a 5-10% correction before any notable upward trend can continue. Currently, Bitcoin is trading around $63,980, a decrease of 0.6% in the past 24 hours, while Ethereum has seen a slight increase of 0.5%, reaching $2,643, according to CoinGecko data.

Market Influences During Spooky Season

Several significant macroeconomic events are also on the horizon this week. These include the U.S. vice-presidential debate between Tim Walz and J.D. Vance on October 1, the U.S. initial jobless claims report due on October 3, and the Nonfarm Payrolls and Unemployment Rate reports on October 4.

Overnight trading in the crypto market has reflected increased volatility. As noted by Jake Ostrovskis, an OTC trader at Wintermute, the implied volatility (IV) for short-term options contracts has risen, resulting in a volatility risk premium (VRP). This indicates traders are bracing for sharp price movements in the near term.

Ostrovskis also pointed to last Friday’s $5 billion options expiration (OPEX) as a potential driver for increased market fluctuations, observable in both Bitcoin and Ethereum trades.

The spot trading of Bitcoin recently dipped below the $65,000 mark. The volatility surface suggests there could be a downside bias lasting until late October or early November. Nonetheless, current market positioning hints at a potential rally post-election.

Bitfinex analysts have cautioned that Bitcoin’s recent gains might be reaching a short-term peak. While Bitcoin has reclaimed critical on-chain levels, such as the Short-Term Holder Realized Price at $62,750, recent trends in spot market buying have plateaued, suggesting a temporary market equilibrium.

Moreover, Bitcoin futures’ open interest (OI) has surpassed $35 billion, a level historically associated with local price peaks. This might indicate market overheating, but analysts believe a modest 5-10% correction could balance OI without disrupting the overall uptrend.

Valentin Fournier from BRN echoed similar sentiments, noting that Bitcoin ended September with a 3.5% loss. The Stochastic RSI shows bullish potential; however, the MACD indicates weakening momentum. Fournier suggested that a dip into the $61,000-$62,500 range could fortify a renewed uptrend.

Fournier also mentioned the significance of the U.S. unemployment rate. A deviation from the expected 4.2% rate could influence market sentiment and affect risk assets, including cryptocurrencies.

The current market trends emphasize the need for vigilance among traders. Stay updated and strategize accordingly for a successful trading experience.

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