Bitcoin (BTC) bulls continue to defend the $80,000 level this week, as the crypto market seems to be nearing the end of this latest pullback phase.
The top token has been tagging and bouncing off this level since Thursday, indicating that institutional volumes are sitting at this psychologically and technically relevant threshold.
That said, trading volumes have retreated lately, dropping to just 1.4% of the asset’s circulating market cap.
A data-light week like this one could give the market the breathing room it needs to let the price action unfold organically. Thus far, the demand for the token has not been able to lift it past the $83,000 area, which would confirm that bulls are once again in control of the situation.
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Whales Buy 50,000 Bitcoin in October
Wall Street’s interest in BTC has faded in October as this pullback has gone on for longer and, perhaps, it has been much stronger than expected.
Net inflows to exchange-traded funds (ETFs) reflect this, as the metric has turned negative in October. Last month, investors poured $2.7 billion into these vehicles. However, sentiment shifted this month, as they have withdrawn nearly $100 million.
Persistent concerns about the impact of high inflation in the United States could be the main cause for this bearish attitude. Both the Consumer Price Index (CPI) and the Producer Price Index (PPI) came in above the market’s estimate for September.
Although analysts continue to expect that the Fed will not raise interest rates this month, the prevailing opinion is that the central bank will have to take more aggressive measures to curb inflation, as oil prices are sitting above $100 again.
Despite this negative macroeconomic backdrop, whale wallets appear to be accumulating BTC frantically at the current price level.
On-chain data from Santiment shows that wallet addresses holding from 1 to 100,000 BTC tokens have added 50,000 tokens to their stash this month. Wallets holding between 100 and 1,000 and 10,000 and 10,000 (mega whales) have been the most aggressive, adding 30,000 tokens each.
This persistent buying could help keep Bitcoin above $80,000 and create a strong floor at this level that ultimately overpowers sellers.
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BTC Could Rally to $87,000 and Offers 4x Risk-Reward Trade
Turning to the 4-hour chart, BTC is still sitting at a “hot” buy zone we designated as such inprevious Bitcoin price prediction articles.
The token briefly broke below this zone on October 15 but quickly recovered. Right now, a confirmed breakout above $83,000 could set in motion a strong rally toward the $87,000 area, which is our nearest target.
In this scenario, the long position we recently shared offers a 4x risk-reward ratio, and it is still in positive territory.
The 200-period exponential moving average (EMA) for BTC in this lower time frame is also sitting near its current price, increasing the technical relevance of its current price moves. This week should be decisive for the top crypto, especially in the absence of major economic data points.
We believe that a bullish recovery is the most likely scenario in this case, but there is also a chance that BTC breaks below $80,000, in which case the odds of a drop to $76,000 will rise dramatically.
