Bitcoin price analysis 18 October: Could new highs sustain?
Bitcoin could hit a new all-time high this week
Bitcoin (BTC) has jumped above $62,000 on speculation that the ProShares Bitcoin exchange-traded fund (ETF) could start trading on the bourses within this week. The ProShares ETF will give exposure to bitcoin futures contracts instead of spot bitcoin and trade under the ticker symbol “BITO”.
Market participants are divided on the impact the new ETF will have on bitcoin’s price. While some believe bitcoin’s price will rally after the ETF starts trading, others are not as confident that institutional investors will make a beeline for the product.
In an interview with MarketWatch, Ben Cruikshank – head of financial services firm Flourish, which was acquired by Massachusetts Mutual Life Insurance Company (MassMutual) in February this year – said: “Registered investment advisers are asking, ‘As a fiduciary, are we going to recommend a complicated futures product that is more complicated than opening a Coinbase account in five minutes?’ It’s a hard thing to justify an inferior futures product. This is less my feedback and more what firms are telling me.”
Contrary to the above opinion, Edward Moya, senior market analyst at trading platform OANDA, believes the bitcoin ETF could prove to be bullish for bitcoin.
"A successful bitcoin ETF launch could easily support bitcoin's run to record territory. [If] initial trading volumes are strong, bitcoin could have enough momentum to target the $74,500 region... and even reach $85,000 in the next few months,” Moya told Business Insider.
While analysts are divided, do the charts project the continuation of a rally or a pullback? Read our bitcoin price trend analysis to find out.
Bitcoin price technical analysis: weekly chart
Both moving averages are sloping up and the relative strength index (RSI) is just below the overbought territory, indicating that the path of least resistance is to the upside.
If bulls drive the price above the overhead resistance at $64,919.10, the uptrend could resume. The first target objective on the upside is the 1.618 Fibonacci extension level at $77,504.14.
Contrary to this assumption, if the price turns down from the current level or the all-time high, the bears will try to pull the price towards the 20-week exponential moving average (EMA).
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The bitcoin price weekly analysis shows that bulls are in command and a rally to a new all-time high is likely.
Bitcoin price technical analysis: daily chart
Bitcoin’s price has been in a strong uptrend. Although the bears tried to stall the up-move at $62,908.70 on 15 October, they could not sustain the price below the psychological support at $60,000, as seen from the long tail on the 17 October Doji candlestick.
The bears are again likely to mount a stiff resistance in the $62,908.70–$64,919.10 resistance zone. A break and close above this zone will signal the resumption of the uptrend.
Alternatively, if the price turns down from the overhead zone, the bears will again attempt to pull the pair back to the 20-day EMA. This is an important support for the bulls to defend, because a break below it will indicate that supply exceeds demand.
That could result in a drop to the breakout level at $52,953.85 – and if this support cracks, the decline could then extend to the 50-day simple moving average (SMA).
How to trade bitcoin this week
Bitcoin remains in a strong uptrend, and if bulls push and sustain the price above the all-time high at $64,919.10, the uptrend could extend to $70,000. It would then move towards the target objective at $77,504.14.
This bullish view will be invalidated, however, if the price turns down from the current level and breaks below the 20-day EMA.
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 always do your own research or contact your financial advisor before arriving at or acting on a decision.