The S&P 500 index has declined about 5% this week while the Nasdaq Composite is down more than 5.5%. Investors fear that the Federal Reserve’s aggressive rate hikes could cause an economic downturn. The yield curve between the two-year and 10-year Treasury notes, which is watched closely by analysts for predicting a recession, has inverted the most since the year 2000.
Among all the mayhem, it is encouraging to see that Bitcoin (BTC) has outperformed both the major indexes and has fallen less than 4% in the week. Could this be a sign that Bitcoin’s bottom may be close by?
On-chain data shows that the amount of Bitcoin supply held by long-term holders in losses reached about 30%, which is 2% to 5% below the level that coincided with Bitcoin’s bottom in March 2020 and December 2018. This metric suggests that Bitcoin could have more room to fall before it bottoms out.
Let’s study the charts of the S&P 500 index, the U.S. dollar index (DXY) and the major cryptocurrencies to determine whether the trend will continue or if a reversal is likely.
The S&P 500 index (SPX) broke below the 3,900 support on Sept. 16 and the bears successfully defended the level on retests on Sept. 17 and 21. Hence, this becomes an important level to keep an eye on as a break above 3,900 will be the first sign that bulls are on a comeback.
The downsloping 20-day exponential moving average (EMA) (3,920) indicates an advantage to bears but the relative strength index (RSI) in the oversold territory suggests that the index may attempt a rebound from the strong support zone between 3,715 and 3,636.
A weak rebound off this zone will indicate a lack of aggressive buying by the bulls. That could increase the possibility of a decline below the crucial June low at 3,636. If this support collapses, the index could plunge toward 3,325.
On the contrary, a strong rebound off the support zone could result in a recovery to 3,900. A break above this resistance could signal a potential trend change in the near term.
The U.S. dollar index (DXY) has been in a strong uptrend for the past few months. Every dip is being purchased aggressively and the index continues to scale new heights. Attempts by the bears to force a trend change failed when the price rebounded off the 50-day simple moving average (SMA) ($108) on Sept. 13.
After staying in a tight range for a few days, the index broke out to a new 52-week high on Sept. 21. This resumed the uptrend and the index could next attempt a rally to 115.
The sharp rally of the past few days has pushed the RSI into the overbought zone, which suggests a minor consolidation or correction is possible in the next few days.
The 20-day EMA (109) is an important support to watch for on the downside because a break below it could sink the price to the 50-day SMA. The bears will have to pull the price below 107 to indicate a possible trend change in the near term.
Buyers have been buying the dip below $18,626 in Bitcoin but the failure to push the price above the 20-day EMA ($19,841) shows that bears are in no mood to let go of their advantage. This increases the possibility of a retest of the vital June low at $17,622.
A break and close below $17,622 could create panic and the BTC/USDT pair may plummet to the next major support at $14,500.
While the downsloping moving averages indicate advantage to bears, the positive divergence on the RSI suggests that the selling pressure could be reducing. This view could strengthen if bulls drive and sustain the price above the 20-day EMA.
That could push the price toward the overhead resistance zone between the 50-day SMA (21,200) and $22,799. Such a move will suggest that the pair may continue its bottoming formation inside the large range between $17,622 and $25,211 for longer.
Ether (ETH) has been trading inside a descending channel pattern for the past few days. In a channel, traders usually buy near the support and sell close to the resistance.
The bears tried to sink the price below the channel on Sept. 21 but the bulls defended the level successfully. The bulls will try to push the price to the 20-day EMA ($1,467) where they may face stiff resistance from the bears.
If the price turns down from the current level or the 20-day EMA, it will suggest that the sentiment remains negative and traders are selling on every minor rally. The bears will then again try to pull the price below the channel and challenge the psychological support at $1,000.
Contrarily, if the price rises above the 20-day EMA, the pair could reach the resistance line of the channel. A break and close above the channel could suggest a potential trend change.
BNB has been oscillating between the 20-day EMA ($276) and $258 for the past few days. This shows that the bulls are defending the immediate support at $258 but they have failed to push the price above the 20-day EMA.
This tight-range trading is unlikely to continue for long. If buyers propel the price above the 20-day EMA, the BNB/USDT pair could rise to the resistance line of the descending channel. The bulls will have to overcome this obstacle to suggest that the corrective phase may be over. The pair could then attempt a rally to $338.
If the price turns down from the current level or the resistance line of the channel, the bears will again try to sink the pair below $258. If they manage to do that, the pair could decline to the support line.
XRP broke above the $0.41 overhead resistance on Sept. 20. The bears tried to trap the aggressive bulls on Sept. 21 but the buyers had other plans. They purchased the dip with vigor and thrust the price above the overhead resistance on Sept. 22.
The pattern target of the break from the $0.30 to $0.41 range was $0.52 and the same was reached on Sept. 23. This sharp move pushed the RSI into the overbought territory, suggesting a minor correction or consolidation in the near term. The long wick on the Sept. 23 candlestick shows profit-booking at higher levels.
Usually, after the breakout from a range, the price tends to retest the breakout level. In this case, the price could drop to $0.41. If bulls flip this level into support, the XRP/USDT will try to resume the up-move. If the price rises above $0.56, the next stop could be $0.66. On the other hand, a break below $0.41 could suggest that the recent breakout was a bear trap.
Cardano (ADA) bounced off the uptrend line on Sept. 22, indicating that bulls are defending this level with vigor. The price reached near the downtrend line on Sept. 23 but the long wick on the candlestick shows that bears are active at higher levels.
The 20-day EMA ($0.46) has started to turn down and the RSI is just below the midpoint, indicating a minor advantage to bears. If the price continues lower and plummets below the uptrend line, the ADA/USDT pair could drop to $0.40. This is an important level for the bulls to defend because a break below it could resume the downtrend.
If bulls want to gain the upper hand, they will have to drive and sustain the price above the downtrend line. The pair could then rise to $0.60 where the bears may again mount a stiff resistance.
Solana (SOL) has been getting squeezed between the 20-day EMA ($33) and the immediate support at $30. This indicates a state of equilibrium between buyers and sellers.
This uncertainty is unlikely to continue for long. The bears will try to seize control by pulling the price below $30. If that happens, the SOL/USDT pair could drop to the strong support at $26. The bulls are expected to defend this level aggressively because if this support cracks, the SOL/USDT pair could witness panic selling and drop toward $20.
To invalidate this negative view in the short term, buyers will have to drive the price above the moving averages and the overhead resistance at $39. If they succeed, the pair could rally to $48.
Buyers bought the dip below the immediate support on Sept. 21 but they are struggling to sustain Dogecoin (DOGE) above the 20-day EMA ($0.06) on Sept. 23. This suggests that bears continue to sell on rallies.
The bears will attempt to increase their advantage by sinking the price below the immediate support near $0.06. If they do that, the DOGE/USDT pair could extend its decline to the June low at $0.05. This is a pivotal level because a break below it could indicate the start of the next leg of the downtrend.
Conversely, if the price sustains above the 20-day EMA, the pair could rise to the 50-day SMA ($0.07). If bulls pierce this resistance, the pair could rally toward $0.09.
Buyers successfully defended the critical support of $6 on Sept. 21 and 22 but the shallow bounce suggests that demand dries up at higher levels. The longer Polkadot (DOT) trades below the 20-day EMA (6.87), the greater the possibility of a break below $6.
If bears sink and sustain the price below $6, the selling momentum could pick up and the DOT/USDT pair could resume its downtrend. The next major support on the downside is at $4.
Alternatively, if the price rebounds off $6 or turns up sharply after breaking below the support, it will suggest that bulls continue to buy at lower levels. The bulls will have to propel the price above the moving averages to clear the path for a possible up-move to $10, which, again, is likely to act as a barrier.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
4 On-Chain Metrics Show the Bitcoin Price Is Primed for Bullish Explosion
Bitcoin has been consolidating in a narrow range between $18,800 and $20,200 since the mid-Sept price fall. In volatile markets like cryptocurrency, similar quiet periods of consolidation are rare.
Recent Glassnode findings show that the current BTC price action resembles both pre-crash November 2018 and pre-rally March 2019. Despite price downturns, mining and accumulation statistics are improving. Let’s look into what this means for the health of the network.
Bitcoin hashrate makes new ATH
Last week, the Bitcoin hashrate made a new all-time high of 242 exahashes per second.
In the chart below, we can see that Bitcoin’s longer-term, slower hash ribbon was once again overtaken by the faster ribbon, indicating improved mining conditions in late August. Since the price saw no major uptick during this time, the rise in hashrate was likely due to more efficient mining hardware and more mining rigs working in general.
Historically, these hash ribbon moving average swaps precede price gains. Historically, when the hash-rate drops and subsequently recovers, major BTC price bottoms have been made.
Is a price bottom in?
Apart from the hashrate, Bitcoin accumulation levels also reached a 7-year high. CryptoQuant data shows that 6-month-old and older Bitcoins now make up 74% of the realized cap. During the 2019 and 2015 bottoms, this score sat at 70% and 77%, respectively.
Lastly, for the first time in this cycle, the percentage of supply in loss has reached the 50% level.
CryptoQuant data shows that the price bottoms during previous cycles normally occur when the percentage of supply in loss reaches 50% or more.
The current data shows the highest percentage of losses at 52% on the daily chart, 50.4% on the weekly (7DMA), and 48% on the monthly (30DMA).
While quite a few metrics suggest that BTC should be near a bottom, the overall momentum will likely still depend on macroeconomic conditions as well as its correlation with the Nasdaq and S&P 500.
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Bitcoin price sees first October spike above $20K as daily gains hit 5%
BTC price action sees a new October peak amid a declining U.S. dollar and a successful prior day’s trading for U.S. equities.
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Bitcoin (BTC) saw its first trip above $20,000 on Oct. 4 as traders expected familiar resistance to cap gains.
Multi-week dollar lows fuel Bitcoin bulls
The pair had shaken off macroeconomic concerns at the start of the week, with trouble at Credit Suisse and the escalating Russia-Ukraine conflict failing to slow performance.
Now, the short-term analysis focused on a run potentially topping out closer to $21,000 — as was the case late last month, as sell-side pressure at that level remained significant.
“20500-21000 is a sell zone. If price gets there, which should, don’t be too bullish,” popular trader Il Capo of Crypto told Twitter followers on the day.
Razzoorn, an analyst at international trade group The Birb Nest, noted that the current charge was Bitcoin’s fifth attempt at escaping a major liquidity cloud in several weeks.
Despite the potentially limited upside opportunity, Bitcoin rallied in line with a broader risk asset tide which saw United States equities finish noticeably higher the day prior.
At the same time, the U.S. dollar suffered, the U.S. dollar index (DXY) extending losses to approach 111 points and threaten support in place since mid-September.
“Up the market goes,” a more optimistic Michaël van de Poppe, CEO and founder of trading platform Eight, continued:
“Flipping $19,500 for support. Now, if range-high at $19,600 holds for Bitcoin, I assume we’ll continue towards $22,400.”
Altcoins attempt to change sticky trend
ETH/USD traded above $1,350, still yet to break out of its sideways trend in place for several weeks since major losses entered during the post-Merge breakdown.
XRP, on the other hand, faced a more stubborn band of resistance after prior gains, bouncing off multi-week support just below $0.45.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
McDonald’s starts to accept Bitcoin and Tether in Swiss town
The global fast food chain is among the first to participate in a crypto-friendly experiment in the town of Lugano.
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Multinational fast food chain McDonald’s started to accept Bitcoin (BTC) as a payment method in the 63,000-populated city of Lugano in Italian Switzerland, which is becoming a hotspot for crypto adoption in Western Europe.
A one-minute video of ordering food on McDonald’s digital kiosk and then paying for it at the regular register with the help of a mobile app was uploaded on Twitter by Bitcoin Magazine on Oct. 3. The Tether (USDT) logo could be spotted next to the Bitcoin symbol on the credit cash machine, which is not surprising, as in March 2022 the city of Lugano announced it would accept Bitcoin, Tether and the LVGA token as a legal tender.
On March 3, 2022, the city signed a memorandum of understanding with Tether Operations Limited, launching the so-called “Plan B.” According to this plan, Tether has created two funds — the first one is a $106 million, or 100 million Swiss francs, investment pool for crypto startups, and the second is around $3 million, or 3 million Swiss francs, attempt to encourage the adoption of crypto for shops and businesses across the city.
In addition to allowing Lugano residents to pay their taxes using crypto, the project will extend payments to parking tickets, public services and tuition fees for students. More than 200 shops and businesses in the area are also expected to accept crypto payments for goods and services.
Speaking to Cointelegraph in June, Paolo Ardoino, chief technology officer of Tether and Bitfinex, claimed that Plan B “is going great,” announcing a two-week educational activity on blockchain and cryptocurrencies in the city.
In September 2021 El Salvador became the first country in the world to allow using Bitcoin as a legal tender. Since that time, McDonald’s has been accepting Bitcoin at all its 19 outlets in the country.
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