Despite the negative sentiment in global markets, Bitcoin (BTC) managed to hold support and close the week in the green. Currently, the largest cryptocurrency is trading just below the long-term resistance line, the breakout of which could lead to the initiation of an uptrend.
On the other hand, Bitcoin is only slightly above the support area, which has already been tested several times. If a breakdown occurs, it will take the price to new lows, below the June levels.
Bitcoin nears resistance line
Bitcoin has been in a downtrend since the all-time high (ATH) of $69,000 in Nov. 2021. So far, the low was reached at $17,567 in June 2022. This represents a drop of 74% below the ATH.
On the weekly chart, we observe that BTC is dropping along the falling trend line (blue), which rejected the price twice in April and Sept. (blue arrows). Moreover, until the June low, BTC price is consolidating in the $18,880 to $24,316 range.
The price is currently in the lower part of this range, but has again reached the falling downward trend line. A breakout above the diagonal resistance line or a drop below the horizontal support at $18,800 will likely determine the direction of the future trend.
Technical indicators sending mixed signals
The technical indicators on the weekly chart are mixed. The RSI has returned from oversold territory, but is still below the 50 line. It indicates a continuation of the bear market. Despite this, the indicator is on the verge of breaking out of its own downtrend trend line.
The MACD histogram has been generating small green bars for several weeks. However, its signal line is still deep in negative territory.
Finally, steadily increasing volume combined with low volatility on the Bollinger Band Width Percentile (BBWP) suggests that a big move in the Bitcoin price may be coming.
Despite the fact that the price action of the previous weeks did not go beyond the range indicated above, BTC trading volume is slowly increasing (orange line). At the same time, the BBWP is in a blue range, suggesting an impending volatility expansion (ellipse).
Upward Bitcoin breakout more probable
On the daily chart, we can see that Bitcoin has been in a descending parallel channel since reaching a local peak at $25,214 on Aug. 15. Such channels usually contain corrective movements, so there is a higher probability of an upward breakout from this pattern. In the event of an upward move, the target is near the aforementioned Aug. peak.
If, on the other hand, the median of the channel, which currently corresponds to weekly support at $18,800 (orange), is lost, the declines will continue. These would lead to the support line of the channel and a new BTC low near $16,000.
Are we in for a green month?
Well-known cryptocurrency analyst @intocryptoverse tweeted a table of monthly returns throughout Bitcoin’s history. He pointed out that Sept. ended in typical red fashion. However, he pointed out that this year’s 2.73% decline was the lowest of all 10 of the 13 historical Septembers that were in the red.
What’s more, in the table we see that Oct. is among the top three best months for Bitcoin – just behind Nov. and April. The average return for this month is 29.6%. Moreover, only four of the 12 Oct. months ended in the red.
For Be[in]Crypto’s previous Bitcoin (BTC) analysis, click here.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
