BITCOIN WEEKLY ANALYSIS (OCT 6 — OCT 12)

by Viko

Bitcoin (BTC) jumped 5.1% on Wednesday to the highest price in three weeks, after the Federal Reserve (Fed) said it would print money to expand the size of bank reserves (inflationary move). The top cryptocurrency surged to $8,587.29 as of 19:35 UTC time (3:35 p.m. New York time). Bitcoin suffered a steep drop in late September tumbling from $10,000 to $8300. Market analysts attributed this drop to big margin calls on the Bitmex exchange and disappointment over the debut of a new futures contract on the Intercontinental Exchange’s Bakkt digital asset trading platform (discussed in our previous blogs). Since its $1,700 drop on Sept. 24, Bitcoin largely has struggled to maintain its 200-day moving average (MA) as support as it travels around this mark and settles. The BTC/USD pair climbed more than 5% and broke the $8,500 and $8,700 resistance levels. A new monthly high was formed near the $8,934 level and later the price started a sharp downward move. The price broke the $8,800 and $8,500 support levels. Additionally, there was a break below the 50% Fib retracement level of the upward move from the $7,763 low to $8,934 high.

Bitcoin’s stark rejection from $8,800 does not appear to be ideal for bullish days ahead because the asset also was not quite able to reach the level from which it originally broke down. More importantly, looking at the 4-hour charts a support was forming near $8400 and the support break this week. The pair even traded below the $8,350 support area. Currently, the price is consolidating losses above the $8,300 support area. It seems like there is strong support forming near the $8,300 level and the 100 simple moving average. If there is a downside break below the $8,300 support area, bitcoin price could move back into a bearish zone below $7800.

Moreover, there was a close above $8,500 and the 100 simple moving average (4-hours). The 200-day MA is commonly used as a notable benchmark regarding bullish and bearish trends for Bitcoin. Bitcoin was also unable to reach its previous support ranging from $9,000 to $9,500, and now this zone is likely to act as a resistance.

The next key support area is near the $8,200 level, below which it could move towards the $8,000 level. On the upside, there is a major hurdle forming near the $8,500 and $8,600 levels. A convincing close above the $8,550 resistance area could set the tone for more upsides in the coming sessions.

Technicals — Bitcoin’s one-day Moving Average Convergence Divergence (MACD), a lagging indicator that tracks market trends and momentum, has crossed into the green after a precipitous drop to the most oversold levels since the December crash. This technically forecasts bullish trends to follow in the near future. RSl is also travelling near 50 which also indicates bullish runs for the next few days. But the market still largely been driven by sentiments can’t be declared to run on a pre-decided path even after all the technical analysis.

The state of the altcoin market seems to have changed though, as Bitcoin’s market dominance falls and many digital assets start to show positive market data. Some altcoin projects have also come forward with announcements, adding positive sentiment to the scene. This week Binance Coin (BNB) climbed more than 9% after Binance announced compatibility with Alibaba’s Alipay service and popular messaging platform WeChat, opening the door for fiat payments on the exchange. Less than 24-hours later Alipay and WeChat strongly refuted this announcement and Binance CEO Changpeng Zhao issued a tweet attempting to clarify the situation.

2 days ago sentiments arising from the rejection of yet another Bitcoin exchange-traded fund in the US kept potential buyers at a distance. On the US-China trade war, President Donald Trump said that their discussion with the Chinese is “going very well” shortly after Beijing offered to purchase more agricultural products from the US. Cointelegraph mentions “meanwhile, investors welcomed Trump’s comments on the dispute.” Their interest in the risk-on assets like equities peaked at its highest this week, with the US benchmark S&P 500 closing Thursday 0.6% higher, while its futures are indicating a 0.5% increase. Bitcoin, which earlier served as a backup asset against the US-China trade war and Brexit, behaved negatively to the resolve.

Also in the news :

  • United Nations International Children’s Emergency Fund (UNICEF) has launched UNICEF Cryptocurrency Fund. Currently, accepting only Ethereum and Bitcoin, UNICEF will use cryptocurrencies to fund open source technology benefiting children and young people around the world.
  • Facebook’s Libra cryptocurrency coalition is falling apart as eBay, Visa, Mastercard and Stripe all at once jumped out of the ship. The news comes one week after PayPal announced its withdrawal as government regulators continue to scrutinize the plans.

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