Navigating Bitcoin’s recovery
Oct 27•8 min read
In this patch of your weekly Dispatch:
- December in focus
- BTC: leverage and holders
- AI stocks: the earnings test
Market cast
BTC: Support holds as momentum weakens
On the weekly chart, Bitcoin’s momentum is fading, but strong support in the $79,000-$80,000 zone is holding the price for now. The Stochastic, a momentum oscillator, has turned down from overbought territory, while the RSI, another momentum oscillator, is neutral. The MACD, a trend and momentum indicator, keeps its histogram positive but shrinking toward the zero line.
On the daily chart, price is hovering near the lower Bollinger Band, a volatility-based indicator, and bearish momentum dominates this timeframe. The RSI is falling, the Stochastic is in oversold territory, and the MACD histogram is negative.
Key levels to watch: on the downside, immediate support sits in the $79,000-$80,000 zone, with the next level near $76,000 — the daily lower Bollinger Band also lends dynamic support. To the upside, resistance comes in around $82,000, followed by $84,000.
The big idea
Three central banks, one December question for Bitcoin
Bitcoin spent the weekend drifting to a low near $79,000, then opened Monday with a swift recovery above $80,000. It looked like a market catching its breath, and the calendar offers little time to do it. Between Wednesday and Friday, the Federal Reserve, the European Central Bank and the Bank of Japan announce decisions, and the US publishes the data that tests them. All three are expected to hold, so the question is less the decisions themselves than what each signals about December, when a hike becomes plausible. For Bitcoin, the question is whether tighter policy and higher yields arrive while its recovery is still young.
Three banks, three outlooks: Each bank arrives with a different market expectation attached. The Fed is about 90% priced to hold this week, yet a December hike is priced close to 80%. ECB hike odds have slipped as yields eased and French bonds came under strain, with France’s 10-year yield about 170 basis points above Germany’s, the widest gap since 2011. The BoJ, holding at 1.25%, carries the firmest bet, with a December hike more probable. Because the bets differ, the data between the meetings matters more than the meetings.
The data in the middle: This Thursday is the hinge. After the Fed has spoken and 45 minutes before the ECB, the US publishes third-quarter GDP and September core PCE. Core PCE, the Fed’s preferred inflation gauge, shows whether the energy shock is reaching underlying prices, and GDP shows whether the economy can absorb another hike. The backdrop adds uncertainty: a conflict-driven oil shock (Brent around $110, year-ahead US inflation expectations at 4.7%), French fiscal stress, and Japan, the largest foreign holder of US Treasuries, tightening while yen-funded trades remain a source of cheap global funding. Any of these can move inflation and yields faster than a central bank can respond, so December pricing is hard to predict. For crypto, that open question shows in how traders and holders are positioned.
How market participants position: Leverage has been building. Per Glassnode data, futures open interest has risen about 6% in October, its highest since September 22, even as Bitcoin slipped from just under $85,000 to over $80,000. Funding rates are modestly positive at about 0.005% against a one-year high near 0.011%, a mild long lean and not a crowded one. Options send a mixed signal. Friday’s expiry, which settles five hours after the BoJ decision, is call-heavy, with calls outnumbering puts almost two to one and clustering well above the market, around $90,000 to $100,000. Yet puts trade at a premium to calls the same distance from the market, a sign of demand for protection, and by the one-month measure that is the most cautious reading since early August. Together, the picture is of traders holding more exposure than a month ago but paying to protect it, with no consensus on where price settles.
What holders are doing: The holder data points the same way Long-term holders have cut their holdings every day since August 1 (net change near -139,000 BTC, heavier than on 87% of days in the past year), according to Glassnode. Short-term holders selling at a loss made up 45% of exchange deposit volume this past week, up from 33% in early October and 62% on Sunday, a share topped on only 7% of days this year. Long-term holders in profit account for 17%, over twice the yearly average, and those at a loss just 2%, against 13%. What does this tell us? Recent buyers are leaving at a loss and older holders are taking profit consistent with a market waiting for this week’s signals.
What could move prices: A soft core PCE and a Fed that holds without committing to December, with oil and yields easing, could take pressure off leveraged positions and off holders selling at a loss. A firm December signal, a hot core PCE, renewed oil gains or a 10-year yield back above 5% would test that leverage, with Friday’s expiry able to amplify the move.
The longer view: The indecision is not new. ETF flows show it too: October’s longest inflow streak has lasted three trading days and its longest outflow streak two, with the latest run ending in about $773 million of net outflows on October 22 and 23, against streaks of seven and more than ten days earlier this year. The clock matters as well. Bitcoin is about 120 days past its late-June low, up more than a third and still more than a third below its October 2025 high. For a drawdown of roughly 55%, history points to a recovery of around 230 days – a reference and not a forecast, since recoveries vary. By that measure Bitcoin is not running late, and setbacks would fit the pattern. Rates will not change this week. The path to December can.
TradFi trends
AI faces its earnings test
AI stocks had a rough week. Chips suffered their worst day since June on Thursday, with the Philadelphia Semiconductor Index down about 6.7% on supply-constraint warnings, before a modest bounce. Now it’s time for the big spenders report: Microsoft and Alphabet on Wednesday, Amazon on Thursday.
The test is simple: does cloud growth justify the spending? Azure grew 43% last quarter and Microsoft guided for about 45%, and options price a move of about 5.3% either way. Strong numbers could steady the AI trade and support the wider risk recovery Bitcoin is part of. A bigger bill without faster growth would deepen the doubt.
Ethereum
A delay before the upgrade deadline
Ethereum’s next upgrade, Glamsterdam, has hit a speed bump. Developers postponed its Hoodi testnet deployment, due October 26, after ChainSecurity found that the upgrade’s new gas rules could change how some smart contracts behave. It found 13 real-world examples.
Mainnet is unaffected, and catching a problem before real funds are involved is what testnets are for. No new date has been set. The delay arrives with Ether down about 12% this month and below $2,300, and a clear new date and a clean review would remove one uncertainty from that picture. Nexo will support the upgrade, so stay tuned as details of the new date emerge.
The week's most interesting data story
The level Bitcoin needs to reclaim
Bitcoin started the week above $80,000, but the weekend dip put many recent buyers in the red. According to Glassnode, as of Sunday, 47% of the coins held by newer investors (those holding under about five months) were bought above the current price, up from 14% on October 21. About a third of those coins were bought between $80,000 and $84,000, so that range is where most of the pressure sits. Across all holders, about 32% of bitcoin is now at a loss, up from roughly 20% in early October. This week’s data will show whether Bitcoin climbs back through that range or stalls below it..
The numbers
The week’s most interesting numbers
10,452 – ETH added by Bitmine last week, lifting its holdings to 4.95% of Ethereum’s circulating supply, the company said.
5 – Consecutive weekly closes above Bitcoin’s 50-week moving average, after 44 below, as Galaxy calls the end of the bear market.
9.4% – Market-implied odds of a Fed hike this week, down from 64.2% a month ago, though a December hike is still priced near 68%.
$11 billion – Bitcoin options expiring Friday, 35% of its open contracts and the largest on its calendar.
Hot topic
What the community is discussing
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