Bitcoin price analysis for September 28-Oct 4: the coin is getting ready for a sharp up-move

Bitcoin has bounced off the critical support levels and could now resume its uptrend if the bulls can drive the price above the downtrend line

Major cryptocurrency exchange KuCoin was hacked and over $150m in user funds were siphoned off from the hot wallets. News reports of such hacks in the past have led to sharp sell-offs in crypto prices. However, this time, there was no price damage, which shows that the crypto markets have matured.

As of Sunday, Bitcoin’s price has closed above the psychologically important level of $10,000 for 63 consecutive days, according to Messari. This has eclipsed Bitcoin’s previous 62-day streak recorded between December 1 2017, to January 31 2018.

The Grayscale Bitcoin Trust has purchased about 17,100 Bitcoin in the past seven days, according to bybt.com data. This purchase takes Grayscale’s total stake to 449,900 Bitcoin, which is 2.14 per cent of the maximum possible Bitcoin supply of 21 million.

Has Bitcoin bottomed out and can it resume its up-move? Let’s do the Bitcoin price trend analysis of the weekly chart to find out.

Bitcoin price technical analysis: weekly chart

Bitcoin bounced off the 20-week EMA and made a long tail on the weekly candlestick that shows the bulls are accumulating at lower levels. The cryptocurrency corrected marginally by 1.30 per cent to end the week at $10,777.65.

This week, the bulls will try to resume the uptrend by pushing the price above the downtrend line. If they succeed, the BTC/USD pair can move up to $12,481.65 and above it to $14,000.

The upsloping moving averages and the RSI in the positive territory suggest that the medium-term and the long-term trend favours the bulls. 

However, the bears are likely to have other plans and they will try to stall the relief rally at the downtrend line. If the pair turns down from this resistance, the bears will once again try to break the $9,832.05 support.

Such a move will be a huge negative as it may result in panic selling. The next support on the downside is at the 50-week SMA. 

The Bitcoin price weekly analysis shows that the bulls are buying on dips but can they sustain the up-move and push the price above the overhead resistance? Let’s do the BTC price analysis of the daily chart to find out.

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Bitcoin price technical analysis: daily chart

In a downtrend, the bears usually short on pullbacks to the 20-day EMA as it increases the risk to reward ratio of the trade. However, if the bulls can push the price above this resistance, it will suggest that the selling pressure is reducing. 

This scenario played out in Bitcoin last week when the price rebounded sharply from the uptrend line on September 24 and rose above the 20-day EMA. Although the bears pulled the price back below the 20-day EMA on the next day, they could not sustain the lower levels. 

After staying close to the 20-day EMA for the past three days, the price has broken out today and the bulls will now attempt to propel the pair above $11,180.95 and the downtrend line. If they succeed, the uptrend is likely to resume.

However, if the price turns down from the downtrend line, the pair may remain range-bound for a few days. The flat moving averages and the RSI just above the 50 level point to a balance between supply and demand.

This view will be invalidated if the pair turns down from the current levels or the overhead resistance and sustains below the 20-day EMA.

How to trade Bitcoin this week

Bitcoin may pick up momentum if the bulls can clear the hurdle at the downtrend line. Hence, traders can consider initiating long positions on a breakout and close (UTC time) above the downtrend line.

However, the traders can remain on the sidelines if the price turns down sharply from the downtrend line because such a move will signal the possibility of a consolidation for a few days.

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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