Bitcoin has been in a consolidation for the past several weeks. Though September has been a historically weak month for Bitcoin, buyers held their ground and did not allow the price to collapse. According to CoinGlass data, Bitcoin recorded its third positive monthly close for September since 2013, with a 3.91% rise. This will help boost investor sentiment and lay the stage for October.
Historical data shows that October favors the bulls. There have been only two negative monthly closes in October, in 2014 and again in 2018. Due to October’s bullish record, it is also affectionately called “Uptober.” True to its name, Bitcoin started October with a bang and rose above $28,500 in the first two days. The upmove may have also been supported by the news that the United States Congress passed a last minute deal to avoid a government shutdown on September 30.
We said in the previous analysis that the bulls are trying to flip the 20-day exponential moving average (EMA) into support and if they do that, Bitcoin could climb to the 50-day simple moving average (SMA) and later to $28,185 and that is what happened . The bulls pushed the price above $28,185 on October 2 but the long wick on the candlestick shows aggressive selling by the bears. The sellers are trying to keep the BTC/USD pair inside the range between $28,185 and $25,000 but the bulls are likely to have other plans.
The rising 20-day EMA and the relative strength index (RSI) in the positive territory indicate that bulls have the upper hand. If the price rebounds off the 20-day EMA, it will signal that the sentiment remains positive. That will enhance the prospects of a break above $28,185. If that happens, the pair may attempt a rally to $30,000 and then to $31,000. Contrary to this assumption, if the bears sink the price below the 20-day EMA, it will suggest that the range remains in force.
In a range, traders generally buy near the support and sell at the resistance. The bears will have to sink and sustain the price below $25,000 to gain the upper hand.
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