Bitcoin (BTC), despite a strong rebound rally just before its close, failed to break the so called September curse. Its price fell by slightly over 7% in the month. Bitcoin (BTC) appears to be making an October comeback, a month that is known for its aggressive bullish reversals.
According to Bybt data, Bitcoin closed October with profits most of the time since 2013, with a success rate exceeding 77%. After a 7.5% drop in September, Bitcoin’s value soared 28% to $13,500.
Bitcoin monthly returns since 2013. Source: Bybt
Bitcoin also rose by more than 10% at the end of October 2019, despite having plunged by 14% the month before. September looked like a sell-off month to traders with its seven-out-of-9 losses since 2013.
However, October was seen as a period for dip-buying. This suggests that traders could end up pushing Bitcoin’s price higher before Oct. 31.
Despite alarming signs from China’s intensifying crackdown on crypto-sector, the October fractal surfaced despite the United States’ tougher regulatory stance.
Bitcoin’s upside outlook is also being limited by the Federal Reserve’s possibility of limiting its $120-billion-a month bond-purchasing program later in the year. Combining loose monetary policy with near-zero interest rates by the U.S. central banks, Bitcoin’s price surged from $4,000 in March 2020 down to $65,000 in April 2021.
Despite the temporary setbacks, key indicators showed that investors still desire exposure to the booming cryptocurrency market.
Inflows into institutions
CryptoCompare, a crypto data tracking service, noted that September saw a 9.6% increase in volumes for digital asset investments products. The weekly product inflows grew to $69.7 millions, which is the highest level since May 2021.
CryptoCompare stated that Bitcoin-based products saw the greatest inflows of any asset, an average of $31.2 million per Week. They also suggested that there could be upside going into 2021’s last quarter.
The average weekly net inflow per asset for September is the following: Source: CryptoCompare
The 20-week EMA fractal
The technical indicators pointed to a bullish session for Bitcoin. It formed a base at $40,000 just before September’s close and reclaimed key resistance levels. This included the bias-defining 21 week exponential moving average (21 week EMA).
Cointelegraph reported earlier that Bitcoin’s chance of continuing falling by 78% increased if it falls below the 21-week EMA. The green wave was below Bitcoin on Sept 27, but it was reclaimed by the cryptocurrency as support during the October session.
BTC/USD weekly chart with 20-week EMA-focused bull run. Source: TradingView
A rise in volumes and a move above the 20 week EMA can lead to explosive Bitcoin bull runs. If the fractal continues, the BTC price could reach a new high in the coming sessions.
Bull pennant breakout
Bull pennant is another technical indicator that predicts a bullish outcome in Bitcoin.
Related: Analyst nails Bitcoin Monthly Close 2 Months Running — His October Target is $63K
BTC’s price is consolidating within two converging trendlines after its 500%+ rally.
These lateral moves are seen by traditional analysts as a sign that bullish continuation is occurring. They believe that the price will rise to the flagpole’s length and break the pattern’s upper trendsline.
Bitcoin weekly price chart featuring bull pennant structure. Source: TradingView
Bitcoin appears to be on the right track, with potential breakout moves looking to push its prices towards $100,000 (flagpole’s height at roughly $50,000).
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Eileen Wilson –Technology and Energy
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