Bitcoin price analysis for October 5-11: the coin could remain range-bound in the short term
Bitcoin could consolidate inside a tight range for the next few days but with a bullish bias
The US Commodity Futures Trading Commission announced on Thursday that it has charged five entities and three individuals who allegedly own and operate the derivatives exchange BitMEX with facilitating unregistered trading and other violations.
That was followed by more negative news on Friday when US president Donald Trump announced that he had tested positive for Covid-19.
However, the adverse newsflow has not resulted in any major price drop in cryptocurrencies, which is a sign of a mature market. The stability in Bitcoin’s price shows that the market participants are focused on the fundamentals and are not concerned with short-term fluctuations to news and events.
Will Bitcoin continue to remain range-bound or is it getting ready for a trending move? Let’s do the Bitcoin price trend analysis of the weekly chart to find out.
Bitcoin price technical analysis: weekly chart
Bitcoin formed an inside week candlestick pattern last week, which shows indecision among the bulls and the bears about the next directional move. The biggest cryptocurrency fell 0.97 per cent to end the week at $10,672.85.
The tightening price action is likely to be followed by a range expansion that will determine the direction of the next trending move.
If the bulls can push the price above the downtrend line and the overhead resistance at $11,180.95, a rally to the recent highs at $12,481.65 is possible.
The gradually rising moving averages and the RSI in the positive territory suggest that bulls have the upper hand.
Contrary to this assumption, if the bears sink the BTC/USD pair below the uptrend line and the 20-week EMA, it could result in a sharp decline to the 50-week SMA.
The Bitcoin price weekly analysis suggests that both the bulls and the bears are waiting on the sidelines for a decisive breakout to happen to initiate large bets. Let’s do the BTC price analysis of the daily chart to see if it has formed any bullish set-ups.
Bitcoin price technical analysis: daily chart
What is your sentiment on BTC/USD?
The bulls aggressively purchased the dip to the uptrend line on October 2 but they are struggling to push and sustain the price above the 20-day EMA. This suggests that the bears are defending the zone between the 20-day EMA and the 50-day SMA.
If the bears can sink the pair below the uptrend line, it could result in a retest of the recent lows at $9,832.05. A break below this support will turn the sentiment in favour of the bears.
However, if the bulls can push the price above the downtrend line, the next leg of the up-move is likely to start.
Currently, the moving averages are flat with a mildly negative bias and the RSI is just below the midpoint, which suggests a balance between supply and demand.
How to trade Bitcoin this week
Bitcoin is currently range-bound between the uptrend line and the downtrend line. Trading inside a range can be volatile and random, hence traders can wait for the price to start a new trend before taking large bets.
Long positions can be considered if the price breaks out and closes (UTC time) above the downtrend line. Conversely, opportunities of a short trade might open up for the aggressive traders if the price breaks and closes (UTC time) below the uptrend line.
The first breakout often turns out to be a fake, so traders should be careful before initiating fresh positions.
Traders may avoid the urge to buy if the price breaks and sustains below the uptrend line.
FURTHER READING: Bitcoin explained simply: everything you need to know
FURTHER READING: Bitcoin vs Bitcoin Cash vs Bitcoin SV: the ultimate guide
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