Decentral Block Post

The United States equities markets have made a bullish start to the new week. The S&P 500 is up about 2.60% and the Nasdaq Composite has rallied more than 3%. This indicates that the markets have shrugged off September's high inflation reading and shifted focus onto the third-quarter earnings.

The stock market’s recovery could pave the way for Bitcoin (BTC) to break out of the range it has been stuck in for the past several days. A positive sign for the bulls is that the amount of Bitcoin held in cold storage or lost has risen to a five-year high, according to Glassnode data.

While long-term investors do not seem to be in the mood to sell their holdings at lower levels, smaller investors appear to be making the most of the depressed prices. Glassnode data shows that the number of wallets holding one whole Bitcoin or more has risen sharply in 2022.

What are the levels to watch on the upside that could signal the start of a sustained recovery in Bitcoin and altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin broke above the 20-day exponential moving average ($19,410) on Oct. 17 and the bulls are trying to extend the recovery above the zone between the 50-day simple moving average ($19,691) and the downtrend line.

Ether (ETH) price has been unable to close above $1,400 for the past 29 days and it has been trading in a relatively tight $150 range. At the moment, the $1,250 support and the $1,400 resistance seem difficult to break, but two months ago, Ether was trading at $2,000. The current price range for Ether simply reflects how volatile cryptocurrencies can be.

From one side, investors are calm as Ether trades 50% above the $880 intraday low on June 18. However, the price is still down 65% year-to-date despite the most exciting upgrade in the network's sev-year history.

More importantly, Ethereum's biggest rival, BNB Chain , suffered a cross-chain security exploit on Oct. 6. The $568 million exploit caused BNB Chain to temporarily suspend all transactions on the network, which holds $5.4 billion in smart contracts deposits.

Ether underperformed competing smart contracts like BNB, Cardano (ADA), and Solana (SOL) by 14% since September, even though its TVL in ETH terms increased by 9% during the period. This suggests that the Ethereum network's issues, such as the $3 average transaction fees, weighed on the ETH price.

Traders should look at Ether's derivatives markets data to understand how whales and market makers are positioned.

Ether (ETH) price has been unable to close above $1,400 for the past 29 days and it has been trading in a relatively tight $150 range. At the moment, the $1,250 support and the $1,400 resistance seem difficult to break, but two months ago, Ether was trading at $2,000. The current price range for Ether simply reflects how volatile cryptocurrencies can be.

From one side, investors are calm as Ether trades 50% above the $880 intraday low on June 18. However, the price is still down 65% year-to-date despite the most exciting upgrade in the network's sev-year history.

More importantly, Ethereum's biggest rival, BNB Chain, suffered a cross-chain security exploit on Oct. 6. The $568 million exploit caused BNB Chain to temporarily suspend all transactions on the network, which holds $5.4 billion in smart contracts deposits.

Ether underperformed competing smart contracts like BNB, Cardano (ADA), and Solana (SOL) by 14% since September, even though its TVL in ETH terms increased by 9% during the period. This suggests that the Ethereum network's issues, such as the $3 average transaction fees, weighed on the ETH price.

Traders should look at Ether's derivatives markets data to understand how whales and market makers are positioned.

The S&P 500 and the Nasdaq Composite fell to a new year-to-date low last week and closed the week with a loss of 1.55% and 3.11% respectively.

The scenario changed drastically on Oct. 17 after earnings season ramps up and a sharp policy reversal from UK finance minister Jeremy Hunt added detail to the government's plan to fix his predecessor's (Kwasi Kwarteng) fiscal package which triggered a record fall in the value of the GBP and a near liquidation of pension plans in the United Kingdom.

At the time of writing, the Dow is up 1.78%, while the S&P 500 and Nasdaq present 2.57% and 3.26% respective gains. Meanwhile, Bitcoin (BTC) has managed to stay well above its year-to-date low showing short-term outperformance.

Some analysts expect that Bitcoin could be closer to a bottom. Twitter trader Alan said that the stochastic indicator on Bitcoin’s monthly chart has reached levels similar to that seen during the 2014 and 2018 bear markets, indicating a likely macro bottom.

Similarly, LookIntoBitcoin creator Philip Swift said in an interview with Cointelegraph that Bitcoin could be close to major cycle lows. Citing various metrics, Swift said that Bitcoin may face another two to three months of pain but should start its outperformance in 2023.

The S&P 500 and the Nasdaq Composite fell to a new year-to-date low last week and closed the week with a loss of 1.55% and 3.11%, respectively.

The scenario changed drastically on Oct. 17 after the earnings,  season ramped up and a sharp policy reversal from U.K. Finance Minister Jeremy Hunt added detail to the government's plan to fix his predecessor's (Kwasi Kwarteng's) fiscal package, which had triggered a record fall in the value of the GBP and a near liquidation of pension plans in the United Kingdom.

At the time of writing, the Dow is up 1.78%, while the S&P 500 and Nasdaq present 2.57% and 3.26% respective gains. Meanwhile, Bitcoin (BTC) has managed to stay well above its year-to-date low showing short-term outperformance.

Some analysts expect that Bitcoin could be closer to a bottom. Twitter trader Alan said that the stochastic indicator on Bitcoin’s monthly chart has reached levels similar to those seen during the 2014 and 2018 bear markets, indicating a likely macro bottom.

Similarly, LookIntoBitcoin creator Philip Swift said in an interview with Cointelegraph that Bitcoin could be close to major cycle lows. Citing various metrics, Swift said that Bitcoin may face another two to three months of pain but should start its outperformance in 2023.

Bitcoin (BTC) headed toward $20,000 as United States equities gained at the Oct. 17 Wall Street open.

Stocks climb as U.S. dollar heads lower

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $19,672 on Bitstamp, up 3.5% versus the weekend’s lows.

The pair rose in line with stocks, with the S&P 500 and Nasdaq Composite Index gaining 2.7% and 3.2%, respectively within thirty minutes’ trading.

The action combined with weak U.S. economic data in the form of the Empire State Manufacturing Index, which fell to -9.1 for October, heavily below the forecast -4.3 and September’s -1.5 reading.

“Manufacturing activity declined in New York State, according to the October survey,” the New York Federal Reserve summarized in commentary on the data.

While Bitcoin (BTC) investors may not consider the United States midterm elections a significant event, an eerie fractal from 2018 may provide a clue to what could happen before the year ends.

Bitcoin to hit $12K–$14K after midterms?

Comparing Bitcoin’s price actions prior to the midterm elections of 2018 with those of 2022 shows a strikingly similar bear market trend.

For instance, BTC price trended lower in 2018 while holding a horizontal level near $6,000 as support, only to break below it after the midterm elections.

In 2022, the cryptocurrency has halfway mirrored this trend. Its price now awaits a close below the current horizontal support level of around $19,000. With the midterm elections scheduled for Nov. 8, the said breakdown scenario could occur sooner or later, as illustrated below.

Independent market analyst Aditya Siddhartha Roy thinks Bitcoin’s price will fall into the $12,000-$14,000 range if a similar breakdown occurs. He further notes that the cryptocurrency could bottom out in November or December 2022, just like in 2018.