Analysis: Bitcoin nearly halves September gains as price falls 2.67%

Bitcoin fell 2.67% over the last 24 hours to $81,125, nearly erasing half of September's gains. October has started with losses despite Bitcoin's historical pattern of strong October gains following September declines. The same reversal of the historical pattern occurred last year. Bitcoin's daily chart remains bullish, while the four-hour chart remains bearish.

The macroeconomic backdrop is weighing on Bitcoin. Wall Street retreated from record highs on Wednesday as Brent crude hovered near $100 a barrel and Treasury yields remained near their highest levels since 2002. Minutes from the most recent Federal Reserve meeting showed that most officials expect another rate increase before year end. Bitcoin sold off alongside stocks and gold yesterday, and the decline is slowing but continuing today.

Today's daily candle opened at $83,310.16 and barely reached $83,475.78 before falling to around $81,337, down 2.37%. That low undercut yesterday's $82,776.30 floor and left Bitcoin below the short-term price zone at $82,626.41. Bitcoin traded sideways between roughly $83,000 and $87,000 for more than two weeks after reaching $87,354.33 on Sept. 21. Bitcoin now trades about 5.6% below that peak.

The Average Directional Index measures trend strength regardless of direction, with readings above 25 confirming a trend. Bitcoin's daily Average Directional Index fell to 40.7 from 42.8 yesterday. Buying pressure remains above selling pressure, but bullish sentiment is gradually cooling. The 50-day exponential moving average remains above the 200-day exponential moving average, indicating an intact long-term uptrend. The bullish golden cross remains in place on the daily chart but is weakening on intraday timeframes as Bitcoin approaches the 200-day exponential moving average.

The Relative Strength Index measures buying and selling pressure on a scale from 0 to 100. Bitcoin's Relative Strength Index fell to 45.8 from 52.5 yesterday, below the 50-point boundary between bullish and bearish momentum. The Squeeze Momentum Indicator remains active, indicating compressed volatility ahead of a larger move.

Decrypt ETF flow data shows that spot Bitcoin ETFs recorded $484.9 million in outflows on Oct. 7, the worst day since June. That session erased about 81% of the $595.3 million in inflows over the previous nine sessions. The outflow reduced the 10-day net inflow to $110.4 million. Cumulative net inflows remain at $57.8 billion, making the withdrawal a limited reduction rather than a broad departure so far.

CoinGlass reported roughly $429 million in liquidations over 24 hours, with long positions accounting for 87.5%. Exchanges liquidate leveraged trades when the trades can no longer cover losses, and forced selling can push prices lower. Bitcoin accounted for $135.51 million of the liquidations. Ethereum accounted for $96.14 million. Nearly half of the total, $202.24 million, occurred in the last four hours. The 24-hour total was less than half of yesterday's $969 million, but long positions continue to be liquidated.

A daily close below $82,626.41 would confirm a break of weak support and the continuation of a short bearish correction. A close back above $82,626.41 would preserve the multi-week trading range. The next potential buying zone lies between $81,165.95 and $79,705.49, where pullbacks within uptrends often attract buyers. The daily trend band's upper edge at $79,661.95 lies within about $44 of that zone's lower boundary.

Oil prices, shipping developments in the Strait of Hormuz, Treasury yields and daily ETF flows are the next catalysts to watch. The Federal Reserve's Oct. 27-28 meeting is another potential catalyst, although a rate increase looks unlikely.