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Bitcoin and Ethereum Market Analysis – 01.10.2022

October has been a good month for cryptocurrencies historically and traders may be looking forward to capitalizing on the bullish seasonality, having seen the cryptocurrency hold steady through recent traditional market volatility.

BTC has recorded a good performance in October, in eight out of the past 12 years, with an average return of around 30%. Nonetheless, the bears are still in control as the price has been trapped in a consolidation region between $18K and $25K for the past four months. However, BTC is closer to breaking down the lower boundary.

Presently, day-to-day price action is not encouraging, but looking at HTF charts, investor sentiment and perceptions of valuation do present some moments of relief.

BTC daily chart shows price pressing against a long-term descending trendline.

In my opinion, the chart speaks for itself. Of course, further downside could occur, and the various technical and on-chain indicators have yet to confirm a price bottom.

For the fact that, Bitcoin managed to hold on to $18,500 area despite the ongoing negative sentiment is a boost for an up-spring. The support zone was tested a few times in rapid price movements, but demand remained solid in the lower region. Still, recent price action suggests that the upside momentum remains under considerable pressure.

It’s not bullish at the moment. Stay safe out there, watch position sizes, no leverage, no desire to pick bottoms, preserve mental capital. But if you’re to trade, always follow your trading plan regarding entry, risk management, and trade management.

Chart 1. BTC price pressing against a long-term descending trendline.
Source: Paid content by Peter Brendt and his partners at , BTCUSD Chart by TradingView

BTC weekly chart shows a downward movement within the trend channel and putting BTC in a pole position for more downward slide and the entire structure looking bearish in the last six months.

Bitcoin fell below $20,000 to start the weekend, as bearish sentiment returned following a brief rally late on Friday. The price has been consolidating between the $18K significant support and the $24.6K critical resistance level, forming a descending wedge pattern. Bitcoin must break the wedge’s upper boundary to reach $25K. Depending on how the candle closes and its location to the moving averages will determine the next line of action.

One interesting scenario from the chart is that, the Relative Strength Index (RSI) shows that whilst price was falling it was rising, indicating a bullish divergence. This technical formation reveals a lack of selling pressure and can be a signal the market will reverse and start moving higher.

Chart 2. Downward move within the trend channel.
Source: , BTCUSD Chart by TradingView

The BTC monthly chart shows the BTC price sliding down to the next 4-year cycle low; presently on the 43rd month down the channel. This scenario cuts across all assets, as equity markets have extended their decline. The S&P 500 and the Nasdaq Composite have declined for three quarters in a row, a first since 2009.

Exactly in December 2018, we had one full year of bear market that started in December 2017. Every 4-year cycle comes with tremendous amount of downside to put the bull market in shape, prepare it for the next move and never induce the 4-year cycle.

The declining phase of this 4-year cycle is beginning to look similar to the last 4-year cycle, getting close to that timely band to the next 4-year cycle.

Chart 3. BTC price sliding down to the next 4-year cycle low; presently on the 43rd month down the channel.
Source: , BTCUSD Chart by TradingView

Ethereum once again found footing around the $1,270 area during this week’s volatile price action and later regained the $1320 support. Nonetheless, it continues to trade sideways above the $1,300 region. While there have been short-term downward movements, the cryptocurrency has been ranging in a narrow band since yesterday and is currently trading above the $1,300 area.

Ethereum’s first important move this coming days will be if it can stay above the $1,320 support.
Should such a scenario play out, the $1,450 level could be a decisive point for the cryptocurrency. Keeping demand alive above this value in Ethereum could lead to a trend towards $1,600 and then could rally towards the September high to $2,030.

Chart 4. ETH ranging in a narrow band since yesterday and is currently trading below the key level at $1,350.
Source: , ETHUSD Chart by TradingView