- Bitcoin and Ethereum Surge, Eyes Set on Key Resistance Levels
- Bitcoin's 200-Day MA Break Signals Strong Recovery
- Ethereum's Battle at $1,725: Will It Fuel a Rally or Trigger a Retreat?
Bitcoin took a significant leap on the first day of October, signifying a crucial step toward recovery. Ethereum, by its turn, continued its steep ascent during the last week of September with a similar momentum, aiming to reverse the prevailing trend.
Bitcoin Breaks Above 200-Day MA
Presently, Bitcoin is trading above its 200-day Moving Average (MA) at $28,000, reflecting a 5% increase since the opening price yesterday. This rise is a response to the technical correction that followed the 50-day MA crossing below the 200-day MA in mid-September.
The past 24 hours of appreciation hold significance as Bitcoin has managed to surpass the critical level of $27,300, which previously acted as resistance in the months of May, August, and September, all while experiencing notable trading volume.
Concurrently, there has been a remarkable surge in breaking out of the descending channel formed since the decline that commenced in July.
In the current analysis, based on the decline observed from July to September, it becomes evident that a significant breakthrough has occurred, breaking through the resistance at the Fibonacci 0.382 level, which stands at $27,700.
Bitcoin is presently testing an intermediate resistance at $28,430, corresponding to the Fibonacci 0.5 level for today. Should the day conclude above this threshold, the upward momentum may persist, potentially reaching the more formidable resistance point of $29,130.
Should Bitcoin find support at the Fibonacci 0.618 level, it could pave the way for a breakthrough beyond $30,000, reigniting discussions about the 2023 peak range of $30,000 to $31,000.
Conversely, it is of utmost importance for the ongoing trend that any profit-taking following the sudden surge is absorbed, particularly within the range of $27,700 to $28,000. A successful backtest by buyers within this range could bolster the trend towards the $30,000 region.
The present alignment of short-term Exponential Moving Averages (EMAs) and the Stochastic RSI on the daily chart, displaying signs of a positive crossover, lends support to the upward trajectory. However, it's worth noting the resemblance of the current movement to the bounce observed in June. Consequently, there is potential for a similar momentum to propel Bitcoin to as high as $33,000.
In summary, Bitcoin stands poised to maintain its upward momentum this week, as long as it remains above the 200-day Moving Average level at $28,000, with the upper boundary of the descending channel serving as secondary support.
In the lower scenario, a short-term decline to $26,800 could materialize if the outlook dips below $27,700, potentially leading to a retreat to $25,500—representing the middle boundary of the descending channel.
Among the significant developments this week, Federal Reserve Chairman Jerome Powell's speech today has the potential to inject volatility into the market. The key economic event of the week will be the US Non-Farm Payrolls report scheduled for release on Friday.
Expectations are for lower employment figures in September compared to the previous month. Surpassing these expectations is likely to strengthen the US dollar, while the continued robustness of the economy, despite inflation concerns, could bolster riskier markets. This is due to the fact that the Fed's policy has largely been factored in over the past few months.
Ethereum (ETH)
When assessing the current state of Ethereum, it becomes evident that a notable surge in demand emerged after the $1,500 region was revisited once more in September.
This demand, propelling ETH to the $1,700 range during the previous week, marks the second concerted effort to break free from the downward trend that initially commenced in April, with the initial breakout attempt occurring in July.
Technically, an important resistance price for ETH is in the process of breaking the $1,725 (Fib 0.382) level. Daily closes above this resistance this week could see an increase in buyer volume in the Ethereum market and ETH could quickly move towards the $1,830 - $1,900 range. On this path, $1,780 (Fib 0.5) could challenge the trend as an intermediate resistance.
Moreover, notable progress in Ethereum ETF futures over recent weeks stands out as a pivotal catalyst for the cryptocurrency's steady ascent. Consequently, it holds paramount importance for ETH to transform its resistance, currently averaging around $1,725 for the week, into a supportive level to sustain the upward momentum.
Conversely, an inability to surmount this resistance may trigger a retracement towards $1,650 in the initial phase. Subsequently, in the event of a potential breakout, we could observe the movement extending towards $1,550.
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Disclosure: The authors holds no positions in any of the securities mentioned.