Since the beginning of October, Bitcoin (BTC) has experienced a surge of over 7%, signaling the potential onset of a new bullish wave. On the monthly Heikin Ashi time frame, Bitcoin is on the verge of closing its first month in an upward trend following a period of testing the breakout from its 2021 all-time high (ATH). This positive momentum is further supported by Bitcoin consistently closing above the critical support range of $59,000 to $61,000 since the crypto market downturn on August 5.
Why Bet on a Bullish Breakout for Bitcoin?
Bitcoin’s price is anticipated to reflect the current rally observed in major stock indexes and gold in the near term after a consolidation phase lasting over 31 weeks. The latest market data reveals a significant spike in Bitcoin’s open interest (OI), reaching a multi-month peak of over $37 billion. This increase in OI is accompanied by a reduction in Bitcoin supply on centralized exchanges, driven by institutional investors. Notably, Metaplanet Inc. (Tokyo:3350) recently announced its acquisition of more than 1000 Bitcoins, and BlackRock’s IBIT has been actively accumulating more Bitcoins.
The upcoming US elections and FOMC data releases are expected to heavily influence Bitcoin’s price movements. These events could play a pivotal role in determining the trajectory of Bitcoin in the coming weeks.
Key Levels to Watch Ahead
Bitcoin’s Resistance and Support Levels
As Bitcoin approaches the end of October, it encounters a significant resistance level around $69,000, the same level that triggered a reversal in July. Last week, Bitcoin closed with a Doji candlestick, leading crypto analyst Alan Santana to suggest that bearish sentiments might prevail in the short term before a potential rally towards a new ATH. If Bitcoin loses the crucial support range between $61,000 and $59,000, there is an increased risk of a decline towards $52,000. Conversely, a close above $72,000 in the near term could propel Bitcoin above the $80,000 mark.
Technical Analysis and Market Sentiments
From a technical perspective, Bitcoin is navigating a broadening channel. Although it does not currently resemble a bull flag, the presence of a hammer candlestick pattern often serves as a reversal signal, regardless of whether it appears at resistance or support levels. As traders and investors closely monitor these patterns, the market remains attentive to any signs of a potential breakout or reversal.
In conclusion, Bitcoin’s price action is at a critical juncture, with significant resistance and support levels shaping its trajectory. As market participants assess the impact of macroeconomic factors, institutional investments, and technical indicators, Bitcoin’s potential for a bullish breakout remains a focal point of interest.
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