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Bitcoin (BTC) starts a new week firmly back in the “Uptober” spirit as the weekly close gives way to a classic short squeeze.

In a return to classic BTC price volatility of the kind seen earlier in the month, the largest cryptocurrency is tackling $28,000 ahead of the first Wall Street open.

While still in an established trading range, Bitcoin is keeping traders on their toes — both longs and shorts are getting caught out by short-term spot price moves, and liquidations are mounting.

Sentiment is fluctuating in step with these moves. Heading toward the top of the range, Bitcoin sees a flurry of bullish projections, with these replaced by fear and foreboding when downside reenters.

Well-known market commentators thus remain overall cautious, even as October — traditionally Bitcoin’s best-performing month — plays out.

Behind the scenes, the signs are solid — network fundamentals are headed to new all-time highs, and difficulty is due what could end up its third-largest hike of 2023.

With macroeconomic data giving way to a focus on geopolitical tensions in the Middle East this week, there is plenty for Bitcoin investors to keep an eye on when it comes to external sources of BTC price volatility.

Cointelegraph takes a closer look at these market phenomena and more in Cointelegraph Markets’ weekly rundown of BTC price triggers waiting in the wings.

BTC price: Short squeezes and “old” coins

Weekly close volatility on Bitcoin did not disappoint this week, with one short squeeze following another to see BTC/USD add $1,000, data from Cointelegraph Markets Pro and TradingView confirmed.

BTC/USD 1-hour chart. Source: TradingView

The climate headed into the first Wall Street open is decidedly different to that over the weekend and before, where downside characterized the landscape amid problematic macroeconomic reports from the United States.

Now, optimism is returning, with Michaël van de Poppe, founder and CEO of MN Trading, calling the trip to multi-day highs of $27,975 a “great move.”

“Dips are for buying, most optimal entry would be $27,300,” he told X subscribers in part of the day’s commentary.

Van de Poppe further predicted continuation of the uptrend.

BTC/USD annotated chart. Source: Michaël van de Poppe/X

Covering the impetus behind the latest action, monitoring resource CoinGlass noted liquidations among short BTC positions.

“At 27450, a large number of shorts have been liquidated,” it concluded alongside a liquidation heatmap for BTC/USDT perpetual swaps on largest global exchange Binance.

“Next focus on the liquidation levels of 26500 and 27660.”

BTC/USDT liquidation heatmap. Source: CoinGlass/X

Popular trader Crypto Tony was more cautious, having previously warned of the potential for significant downside pressure taking Bitcoin all the way back to $20,000 in the coming months.

For research firm Santiment, meanwhile, there was more to the change of tone than merely short squeezes.

“Older” BTC was on the move, it showed, having left their wallets after an extended period of dormancy immediately prior to the return to $27,000.

“The largest amount of dormant $BTC changing wallets since July, these spikes in our Age Consumed metric indicate price direction reversals,” part of accompanying comments on an illustrative chart stated.

BTC/USD annotated chart. Source: Santiment/X

Dalio warns over 50/50 outcome of “World War III”

In contrast to last week, the macro landscape in the coming days contains less by way of significant data prints from the U.S.

Instead, nerves over potential market impact from the ongoing Israel-Hamas conflict are taking center stage, while the specter of inflation lingers in the background.

The latter was previously all too clear, as successive data releases last week and before showed U.S. inflation persisting beyond market expectations.

The Federal Reserve’s next meeting to set interest rates is due on Nov. 1, and with two weeks remaining, inflation cues will be all too important for risk asset sentiment.

“2 weeks until the November Fed meeting,” financial commentary resource The Kobeissi Letter summarized on X while shortlisting the week’s main U.S. financial events.

These include a speech from Fed Chair Jerome Powell, one of a total of 17 Fed speakers due to take to the stage this week.

In a sign of the extent to which politics may end up influencing sentiment, Kobeissi was one of many who referenced a grim forecast from billionaire investor Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund.

In a LinkedIn post on Oct. 12, Dalio warned that the risk of “World War III” occurring had increased to 50% over the past two years.

“Fortunately, the progression toward a world war between the biggest powers (the US and China) has not yet crossed the irreversible line from being containable (which it is now) to becoming a brutal war between the biggest powers and their allies,” he wrote.

“If these major powers do have direct fighting with each other, in which one side kills a significant number of people on the other side, we will see the transition from contained pre-hot-war conflicts to a brutal World War III.”

GBTC “discount” closes in on two-year minimum

Beyond BTC price action, a firm resurgence is underway in the biggest Bitcoin institutional investment vehicle.

The Grayscale Bitcoin Trust (GBTC) is now trading at its smallest discount to net asset value (NAV) — the Bitcoin spot price — since December 2021.

As Cointelegraph reported, the discount, which was once a premium, was almost 50% earlier in the year, and GBTC’s turnaround has come in tandem with legal victories for operator Grayscale over U.S. regulators.

Now, markets appear to be more confident than ever that a spot price exchange-traded fund (ETF) — which Grayscale plans to create and launch out of GBTC — will get the go-ahead, opening up a flood of institutional interest in Bitcoin in the process.

“One significant feature of GBTC is that it doesn’t offer a straightforward mechanism for redeeming shares for actual Bitcoin, and it trades over-the-counter (OTC),” popular trader and podcast host Scott Melker, known as “The Wolf of All Streets,” wrote in part of recent X analysis.

“This structural element can lead to instances where its market price deviates from the underlying BTC value. Factors like market speculation, investor sentiment, liquidity constraints, and even regulatory news can influence this price divergence.”

Melker continued that the door opening to GBTC becoming an ETF was “still far from a sure thing.”

“Concurrently, the U.S. Securities and Exchange Commission (SEC) is also scrutinizing several other spot Bitcoin ETF proposals, including those from financial giants like Fidelity, Blackrock, and Franklin Templeton, which adds another layer of complexity and uncertainty to the landscape,” he noted.

GBTC premium vs. asset holdings vs. BTC/USD chart (screenshot). Source: CoinGlass

Mining difficulty set for imminent new record

The latest BTC price increase has helped boost prognoses for Bitcoin network fundamentals.

Ahead of its next automated readjustment on Oct. 16, Bitcoin difficulty is currently forecast to expand to new all-time highs, per data from monitoring resource BTC.com.

Bitcoin network fundamentals overview (screenshot). Source: BTC.com

This is nothing new in 2023, the year in which both difficulty and mining hash rate have frequently achieved new records. The upcoming difficulty hike, however, could make it into the top three year-to-date at nearly 7%.

Should it lock in, difficulty will cross the 60 trillion mark for the first time, reflecting the increasingly stiff competition among miners and unparalleled Bitcoin network security.

Hash rate estimates meanwhile vary significantly by resource. Raw hash rate data from MiningPoolStats shows the latest all-time high of 497.66 exahashes per second (EH/s) hitting on Oct. 9.

Bitcoin raw hash rate data (screenshot). Source: MiningPoolStats

The high difficulty combined with comparatively modest BTC price levels inevitably opens questions over miner profitability. With expenses running ever higher per bitcoin, concerns periodically appear over how incentivized miners are to continue.

Just as with hash rate, estimates vary over how expensive the per-bitcoin aggregate production cost really is, with a multitude of factors including physical location all playing a part in the tally.

As Cointelegraph reported, next year’s block subsidy halving will additionally cut the amount of BTC received per mined block by 50%.

“I think price is okay for miners atm, but come halving and increasing difficulty needs to increase rapidly,” James Straten, research and data analyst at crypto insights firm CryptoSlate, wrote in part of X commentary last week.

A precarious “Uptober”

Does the fate of “Uptober” 2023 hang in the balance?

Related: Bitcoin signals potential range expansion— Will SOL, LDO, ICP and VET follow?

Even modest changes in BTC spot price can influence the month-to-date gains for October thanks to the strength of the current trading range, now in place since March.

While negative just last week, the push to $28,000 now means that BTC/USD is up 3.5% since the beginning of the month.

With two weeks until the monthly close, Bitcoin’s ultimate performance remains anyone’s guess. 3.5%, while far from poor, would still constitute Bitcoin’s weakest October month since 2018.

Data from CoinGlass further shows the worst October on record in 2014 produced “only” 12% losses for Bitcoin, leaving the door open for a new red record should conditions deteriorate.

BTC/USD monthly returns (screenshot). Source: CoinGlass

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.