A bullish Bitcoin broke out of the descending triangle this week, prompting many other altcoins to post double-digit gains. However, toward the end of the week (i.e today), the steam cooled off and the asset seems to be retracing. Well, today is the end of the trading week and the weekly candle will close in a few hours.
Let’s dive into the price action.
Previous Analysis
Last week a bullish MACD cross confirmed that the trend was changing and Bitcoin was becoming bullish once more. The only thing that remained was for the price action to follow suit – and it did. On October 23, 2022, BTC broke up out of the descending triangle.
In our previous article, we touched on descending triangles and how rare it is (37%) for descending triangles to break to the upside. This shows that the market has found its support.
Should You Worry About the Sell-Off?
The bitcoin breakout was epic, but the RSI is still inside a falling wedge. RSI (Relative Strength Index) is a popular technical indicator used to evaluate market strength.
Scaled from 0 to 100, the RSI helps traders determine when an asset is overbought or oversold.
<=30 Indicates an oversold market while >= 70 shows the asset is overbought.
In the BTC weekly RSI chart below, the RSI narrative holds true. When the asset became overbought, it signaled traders to sell, and the price came crashing down. The RSI hit oversold levels a few weeks back, flashing buying signals.
Signal: Bullish
Bitcoin hit a high of $21,012 before immediately cooling off around $20,000 regions. The area has a strong resistance, which could turn into support.
Should the asset hold in this area, we could see a move higher in the coming week, essentially confirming that November will be a bullish month. Bullish targets for Bitcoin in the future should be at $21,800, $22,700, and $25,000.
For the bears in the house, Bitcoin is currently just above the 21-day EMA, and should the bears persist, this moving average should hold nicely. Currently, the 21 EMA sits at $19,600, making this price the bearish target for Bitcoin, should the sell of continue.
The end of October is nigh. By the time we produce another weekly price analysis, we shall be in November.
We opened October with bullish sentiments and our verdict for the month was always bullish. The price was $19,312 by the close of business on October 1, 2022. Today, the price is $20,101. The month ends in three days and we shall update the Bitcoin price as it shall be on the close of business on October 31, 2022.
Novembear or Novembull? Find out in our next week’s article.
Current Price: $20,101
Verdict Next Week: Bullish
Verdict November: ???