Bitcoin holders get clean slate; Will BTC price choose $30,000 or $25,000?

Bitcoin (BTC) price shows indecision as it trades roughly around the $28,000 level. A look at on-chain metrics reveals why sideways movement is predominant and that a sharp move in BTC is likely to arrive soon.

Also read: Bitcoin Weekly Forecast: BTC bearish fractal forecasts correction to $25,000

Bitcoin price action culls all profits and losses

Bitcoin (BTC) price has inflated by 12% in the last month and currently trades sideways around the $28,000 level. But Santiment’s Market Value to Realized Value (MVRV) index shows that holders are neither at profit nor loss. 

This index is used to measure the average profit/loss of investors who purchased BTC over a specified period. The 7-day MVRV gives results for holders who bought BTC over the past week. Currently, the 7-day, 30-day, 90-day and 180-day MVRV are all hovering close to 0, which means that the BTC holders are effectively at a no-profit, no-loss state. 

If there were a lot of investors in profit, the market could form a top as these holders booked profits. On the contrary, if there were a lot of unrealized losses in the market, long-term holders could potentially buy the dip, triggering a rally. Since neither is true, the directional bias for Bitcoin is ambiguous. 

BTC 7, 30, 90, 180-day MVRV 

Assessing BTC’s directional bias

Bitcoin investors should not disregard the macro outlook, especially after the October 6 jobs report. This event showed an addition of 336,000 jobs in September, which was much higher than the forecast of 170,000. Hence, this key macroeconomic event caught the market by surprise and caused the US Dollar to rally, triggering a short-term plummet in risk-on markets.

As a result, the publication of the Federal Open Market Committee (FOMC) minutes on Wednesday is key as Federal Reserve Chairman Jerome Powell could further reinforce the idea of another rate hike in November.

At the start of this week, the CME FedWatch Tool showed a 30.9% probability of a 25 basis point rate hike. After the recent jobs report, this number has dropped to 21.2%. The majority still believe that the Fed will keep the policy rate of 5.25% to 5.50% unchanged. 

CME FedWatch Tool 

In the Jackson Hole meeting, the Fed hinted at one more rate hike in 2023 should the data call for it. Considering the recent jobs report, Powell might reinforce this idea, which could add more headwinds to riskier assets. 

While NFP numbers are important, the inflation numbers and the Core PCE Price Index set to be released on October 11 and October 27 will play a pivotal role in the Fed’s interest rate decision on November 1.

Bitcoin technicals are hesitant but suggest an upside move 

Bitcoin price is hovering below $28,352, which is the midpoint of the 21% crash that occurred between July 13 and September 11. A closer look at the technicals reveals that the Relative Strength Index (RSI)  and Awesome Oscillator (AO) both are not exhibiting bearish signs yet. 

In this case, a further northbound move could be likely for Bitcoin price. 

The target for bulls in this direction would be the buy-side liquidity resting above the swing highs formed between July 20 and August 8. In total, this move would constitute a nearly 9% ascent. 

A wild-card scenario like an approval of spot Bitcoin ETF could send Bitcoin price well above $30,000 and potentially to $35,000 or $40,000. Such a scenario, as mentioned above, is unlikely, but the chances of it occurring are never zero. 

BTC/USDT 1-day chart

On the flip side, if the Fed confirms a rate hike in the FOMC, the short-term implication of this news could send Bitcoin price lower to collect the buy-side liquidity resting around $24,900.