Bitcoin Consolidates Near $34,000 as Market Digests 15% Daily Gains

Bitcoin (BTC) has remained stable around the $34,000 mark following a 15% surge in price on October 24. The cryptocurrency reached a 17-month high of nearly $35,200 amid speculation about the potential approval of a Bitcoin spot price exchange-traded fund (ETF) in the US. However, opinions are divided on Bitcoin's funding rates, with some analysts predicting a potential retracement in the market.

Analyzing the Market Movement

Monitoring resource Material Indicators highlighted a support/resistance flip at $30,600, which played a crucial role in the price surge. The market broke through resistance levels that had been in place for over a year, with an $87 million buy wall at $30.6k serving as the catalyst for the support/resistance flip. As BTC broke through $32,000, the thin liquidity in the market allowed for a rapid increase to $35,000.

Potential Retracement Ahead?

With bid liquidity now pulled from below, there is a possibility of a potential retracement in the market. Funding rates across exchanges are deep inside positive territory, indicating that the majority of traders are longing Bitcoin. This has led some analysts to suggest that the market maker may wipe out those late longs, which could contribute to a deeper consolidation.

Bitcoin's Reaction to US Dollar Movement

Bitcoin has shown mixed reactions to movements in the US dollar index (DXY). While there used to be a clear inverse correlation, the relationship has become less predictable. The recent rebound of the US dollar has coincided with Bitcoin's consolidation, but the cryptocurrency has also experienced a breakout. Analysts believe that the upcoming release of the Personal Consumption Expenditures (PCE) data on October 26 will have a significant impact on the US dollar's strength in the short term.

Looking Ahead

The market will be closely watching the Federal Open Market Committee (FOMC) meeting on November 1, where the Federal Reserve will decide on interest rate policy. Analysts suggest that Bitcoin's performance may be influenced by the outcome of this meeting. As always, investors and traders are advised to conduct their own research and exercise caution when making investment decisions.