Bitcoin rebounded on Tuesday, shaking off recent market jitters and recovering from an earlier dip. The cryptocurrency was up 2.24% at $83,591.79 after falling to $80,953.41, a level that represented a higher low than the previous swing low that initiated its latest upward movement.
The broader market sentiment, as measured by the Crypto Fear and Greed Index, has cooled from "extreme greed" to a neutral 55, down from a peak of 82 in August. This shift reflects a departure from the euphoria seen earlier in the year, though traders are not exhibiting panic.
Traders on the prediction market Myriad are assigning a 54% probability that Bitcoin will touch $80,000 in October, a slight decrease from previous odds. Conversely, there is a 45% chance it could reach $87,500. This indicates a slight improvement in sentiment on Tuesday.
Bitcoin's price action on Tuesday saw it stop just above the $80,365.12 swing low, a key indicator for an uptrend. It also reclaimed the Fibonacci "golden zone" between $81,847.57 and $82,305.50, an area that has historically attracted buyers during pullbacks.
Technical indicators suggest a consolidating trend. The Average Directional Index (ADX), which measures trend strength, is at 29.9 with buyers in control, though it has weakened from a high of 42.8 on October 7. The 50-day exponential moving average remains above the 200-day moving average, a signal of a long-term uptrend. The Relative Strength Index (RSI) is at 53.4, just above the 50 mark that separates bullish from bearish momentum. The Squeeze Momentum Indicator shows compressed volatility, leaning slightly bearish.
Key resistance levels are identified at $84,245.88, which could open the path to $86,644.19 and a high of $87,422.70. Support is seen around $81,603.02, with a close below this level potentially exposing Bitcoin to $77,500.
Short-term catalysts include Wednesday's Consumer Price Index (CPI) report, which is expected to show inflation rising, potentially increasing rate-hike expectations. The Federal Reserve's upcoming meeting on October 27-28 will also be closely watched. Additionally, oil and Iran headlines, Treasury yields, and daily ETF flows are considered short-term drivers.
