A sideways trend has taken over the crypto market, especially for prominent cryptos like Bitcoin (BTC) and Ethereum (ETH).
Following last week’s rejection from highs above $25,000, Bitcoin price has struggled to stay above $26,000 support. This relatively trendless market can be attributed to the lack of liquidity and disinterest from retail investors who fear having to capitulate if declines rally below $25,000 support.
The Bullish Outlook In Bitcoin Price
The daily chart shows the formation of a rectangle pattern likely to validate a bullish breakout to $37,746. However, with the market structure still weak, another minor deep to confirm support of $25,000 and collect liquidity is required before the rectangle breakout.
The 200-week Exponential Moving Average (EMA) (purple) is in line at $56,606 to absorb most of the selling pressure and limit the need for Bitcoin price to stretch the down leg lower below $25,000.
Analysts and traders have conflicting views over the next direction Bitcoin is likely to take. For instance, Rekt Capital, followed by over 353k people on X (formerly Twitter) recently opined that “BTC is positioned for a weekly close above ~$26,000 but below the bull market support band where price is rejecting.”
#BTC is positioned for a Weekly Close above ~$26,000 but below the Bull Market Support Band where price is rejecting
Could the Bull Market Support Band soon reject price back to ~$26k for a retest attempt?
If so, that would be a pivotal retest$BTC #Crypto #Bitcoin pic.twitter.com/fDPk4KabJR
— Rekt Capital (@rektcapital) September 17, 2023
In another update, the trader added that “Bitcoin has since dropped (to $26,000 support). However, that doesn’t change the possibility of potential upside wicking beyond the Lower High resistance in the event of a 2019-style October return of +10% next month.”
“It just changes the peak price point of such a move which would be ~$28710 from current prices.”
Historically, August and September are months characterized by the lowest liquidity but according to Rekt Capital, “October tends to be a very positive month for Bitcoin.”
Nevertheless, there are a lot of similarities between 2019 and 2023 based on the table shared on X by Rekt Capital which implies that Bitcoin price may manage to rally by 10% only in October to $29,200.
In such a case, traders can expect BTC to form a long wick above the resistance shown on the chart in yellow before rolling back and confirming the move as a relief rally.
A glance at the weekly chart shows Bitcoin price below two of the bull market’s moving average indicators; the 21-week EMA (red) and the 100-week EMA (blue) and above the 200-day EMA.
This negative sentiment coupled with a sell signal from the Moving Average Convergence Divergence (MACD) may confirm the sweep through support at $25,000 ahead of the run-up toward $30,000.
Invalidating The Bullish Market
Sustained movement below the primary support at $25,000 would do a lot of damage to the anticipated bull market. Investors are likely to sell in panic and add to the selling pressure. A minor sweep below $25,000 could develop into a full-blown sell-off to $22,000 and if push comes to shove retest $20,000 before another significant recovery begins to play out.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
