Bitcoin price analysis (20–26 September): buy or sell the golden cross?
Bitcoin’s short-term trend could turn bearish below $42,389.50
Bitcoin has completed a golden cross, after the 50-day simple moving average (SMA) rose above the 200-day SMA, which has historically been a bullish event. According to Kraken Intelligence, Bitcoin has an average return of 42% and a median return of 54%, 180 days after the completion of the golden cross.
Analyst William Clemente believes that Bitcoin’s downside looks limited and $39,000 could act as a strong floor. He arrived at a new metric, Illiquid Supply Floor, by combining Glassnode's illiquid supply data with Plan B's popular stock-to-flow model.
Fidelity Digital Assets, in its Institutional Investor Digital Assets Study, said that a survey of institutional investors showed 52% of the participants invest in bitcoin or cryptocurrency. The respondents said the possibility of a huge upside was the most appealing attribute for investing in bitcoin and cryptocurrencies. The biggest barriers for investing included price volatility and a “lack of fundamentals to gauge appropriate value”.
MicroStrategy’s CEO, Michael Saylor, said on 13 September that the company added 5,050 bitcoin, purchased at an average price of about $48,099 per coin, for a total consideration of $242.9 million in cash. After the latest round of purchase, MicroStrategy holds 114,042 bitcoin, bought at an average price of $27,713 per coin.
Will bitcoin rise following the golden cross or will bears fake the pattern? Read our bitcoin price trend analysis to find out.
Bitcoin price technical analysis: weekly chart
Bitcoin’s price bounced off the 20-week exponential moving average (EMA) last week, indicating that bulls are attempting to defend this level. The BTC/USD pair formed an inside-day candlestick pattern, suggesting indecision among the bulls and the bears. The pair rose 2.67% to end the week at $47,264.85.
The pair has turned down today and the bears will again try to sink the price below the 20-week EMA. The repeated retest of a support level tends to weaken it. If the price breaks below the 20-week EMA, the pair could slide to the 50-week SMA.
The bulls are likely to defend this support aggressively. If the price rebounds off this level, the bulls will again try to resume the uptrend by driving the pair above $52,953.85.
On the contrary, if the price breaks below the 50-week SMA, it will indicate that the uptrend is over. The pair could then drop to $30,000. The Bitcoin price weekly analysis shows the bears are attempting to gain the upper hand.
Bitcoin price technical analysis: daily chart
The 50-day SMA has risen above the 200-day SMA but bulls have not been able to sustain Bitcoin’s price above the moving averages. This suggests that bears are trying to trap the aggressive bulls who may have purchased following the golden cross.
If the price breaks and sustains below the 200-day SMA, the decline could extend to $43,388.75 and then to the 7 September intraday low of $42,389.50. This is an important zone to watch out for because if it cracks, the selling could intensify. The pair could then plummet to the next support at $37,282.85.
The relative strength index (RSI) in the negative zone indicates that bears have the upper hand in the short term.
The buyers will have to push the price above the immediate resistance at $48,826.30 to invalidate the negative assumption. If that happens, the pair could rise to $52,953.85.
How to trade bitcoin this week
Bitcoin has broken below the moving averages, indicating that bears have the upper hand. The short-term trend may turn negative on a break and close below $42,389.50. The buyers will have to thrust and sustain the price above $48,826.30 to regain the advantage.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial advisor before arriving at a decision.