- Bitcoin shows signs of a potential bottom as demand recovers and whale holdings remain near 3 million BTC.
- However, macroeconomic pressures and weak spot buying continue to threaten a sustained recovery.
Bitcoin is showing early signs of a potential market bottom as onchain demand improves and whale holdings remain elevated. However, macroeconomic pressures, weak spot market activity and uncertainty over US economic policy continue to weigh on BTC.
Bitcoin traded at $82,620 on Monday, down 1% over the previous 24 hours. Traders are watching upcoming US inflation data for clues about the market’s next move.
Bitcoin’s Price Faces Pressure Ahead of US Inflation Data
Bitcoin has struggled to deliver the strong October rally that some market participants expected. According to crypto trading firm QCP Group, the market has maintained a firmer footing despite concerns over large Bitcoin transfers by the US government and reports of Ledger wallet compromises.
While spot market activity remains subdued, derivatives data suggest that traders are positioning for a potential price breakout.
QCP highlighted a large options position targeting Bitcoin prices of $90,000, $95,000 and $100,000 by October 30. The position reflects interest in a potential rally, although it does not guarantee that Bitcoin will reach those levels.
Macroeconomic data could determine whether Bitcoin breaks out of its current trading range or faces further selling pressure.
The US Consumer Price Index (CPI), due Wednesday, and Producer Price Index (PPI), scheduled for Thursday, are key events for traders this week. Federal Reserve Chair Warsh is also expected to speak at the IMF-World Bank Annual Meetings on Friday.
Hawkish comments from the Fed chair could weigh on risk assets, including Bitcoin, by strengthening expectations for tighter monetary conditions.
Bitcoin Onchain Data Points to a Potential Market Bottom
Despite these risks, CryptoQuant contributor XWIN Japan has identified several onchain indicators that suggest BTC could be approaching a market bottom in October.
In a report published Monday, the contributor noted that elevated US Treasury yields, high oil prices, spot Bitcoin ETF outflows and profit-taking have increased the risk of further declines. These pressures could also trigger liquidations among traders using leverage.
However, three onchain indicators suggest that selling pressure may be easing.
Bitcoin Exchange Reserves Remain Low
Bitcoin reserves on cryptocurrency exchanges remain low despite a recent rebound. Lower reserves can indicate that fewer coins are readily available for immediate sale, potentially reducing the supply of Bitcoin on trading platforms.
However, low exchange reserves alone do not confirm that selling pressure has ended or that a price bottom is in place.
Bitcoin Apparent Demand Shows Recovery
Bitcoin’s Apparent Demand metric has recovered sharply from deeply negative levels. The improvement suggests that demand conditions are recovering after a period of weakness.
A sustained recovery in demand could help Bitcoin stabilize and support a broader price recovery. However, traders will need further evidence that buying activity can absorb selling pressure.
Bitcoin Whale Holdings Approach 3 Million BTC
Large Bitcoin holders, commonly known as whales, have increased their holdings to approximately 3 million BTC, according to XWIN Japan.
Their holdings have also remained elevated during the recent price correction. This trend could indicate continued accumulation by large investors despite market uncertainty.
However, whale holdings do not necessarily signal an immediate rally. Bitcoin’s price will also depend on broader market demand and investor activity.
Oil Prices and US Midterm Elections Could Influence Bitcoin
Changes in oil prices and the approaching US midterm elections could also affect Bitcoin’s outlook.
Brent crude oil prices fell from nearly $110 to around $103, easing some pressure from rising energy costs. Lower oil prices could help reduce inflation concerns, although the broader economic impact remains uncertain.
The US midterm elections, scheduled for November 3, could also influence investor sentiment as markets assess the potential implications for economic and political policy.
Still, these developments may not be enough to trigger a sustained Bitcoin recovery without stronger demand in the spot market.
Bitcoin Needs Stronger Spot Buying to Confirm a Bottom
XWIN Japan said the onchain indicators suggest that conditions for a Bitcoin’s market bottom are improving. However, the contributor emphasized that further confirmation is needed.
Sustained inflows into spot Bitcoin exchange-traded funds (ETFs), stronger US spot-market buying and continued demand recovery would provide more convincing evidence that the market has found a floor.
For now, Bitcoin remains caught between improving onchain indicators and persistent macroeconomic risks. Whether BTC can build a lasting recovery will depend on how demand develops and how markets respond to upcoming US economic data.
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