Bitcoin bounces to $83.3K, but 2 factors cast doubt on BTC’s bull run

Late on Monday, October 12, Bitcoin [BTC] prices dipped to $81k once again. Since then, BTC has seen a 2.9% price bounce to $83.3k in 4 hours, as of the time of writing.

The bounce shouldn’t fool market participants into going long. The net taker volume was negative once again, reported crypto analyst Maartunn. This metric tracks aggressive (market order) taker volume, since takers tend to dictate trend direction.

Using the 30-day moving average to sort out which party is in control, the analyst found that net selling has been predominant throughout October. This helped explain the losses BTC faced the previous week, when it fell from $87k to $80.4k.

Bitcoin traders and investors should be wary of further price decline

BlackRock’s iShares TIPS Bond ETF product invests in inflation-protected public obligations of the U.S. Treasury with a remaining maturity of less than five years.

While the TIPS principal adjusts upward with rising CPI and inflation, the TIPS ETFs are still subject to market interest rates.

Hence, the TIPS ETFs can fall even in conditions of rising inflation, as they did in 2022. The ETF also has an interesting relationship with the Bitcoin price trend forecast.

In the past, the TIPS ETF has started trending higher before Bitcoin, and its bearish direction change has been followed by a Bitcoin downtrend, too.

Crypto intelligence platform Alphractal noted that the iShares TIPS Bond ETF was moving bearishly once again, at a time when short-term caution was the bias for Bitcoin.

Historical correlation does not guarantee future price moves, but it was a warning that Bitcoin might be poised for another bearish price leg.

Electricity production costs highlight newer equipment

The Bitcoin mining scene has always favored newer, faster, more economical mining rigs, requiring miners to balance overhead against investment into new equipment.

Comparing the electricity production costs, crypto analyst Axel Adler Jr. highlighted the stark difference between the Bitmain Antminer S19 and the S21 for mining Bitcoin.

The estimate does not include cooling infrastructure, repairs, or other overhead costs, just estimated electricity.

A decline in Bitcoin prices could further strain the profitability of old models. The network fee was only 0.64% of the share of the miner fee revenue, which means their revenue is almost solely tied to mining rewards.

Final Summary

• Bitcoin net taker volume has been bearish throughout October, helping explain the previous week’s price decline from $87k.
• The TIPS bond ETF trends have led Bitcoin trends in the past, and the TIPS ETF has been falling in recent months.