The price of Bitcoin (BTC) closed September on a positive note, marking a nearly 5% increase for the month. The early days of October have seen a substantial price surge, which is still ongoing.
Analyzing the weekly timeframe, it’s evident that BTC’s price has been rising since the beginning of September 11. This upward movement confirmed the $25,300 horizontal area as a support level. The price acceleration continued into the last week, resulting in the formation of a bullish engulfing candlestick pattern. A bullish engulfing pattern occurs when the entire previous period’s losses are erased, signifying a positive outlook for future price trends.
However, despite this bullish momentum, Bitcoin has not fully recovered from the losses incurred during the decline that began on August 17, which created a bearish engulfing candlestick pattern. This bearish pattern initiated just below the $30,500 horizontal resistance area, starting at $29,200.
Bitcoin’s Strong October Start Fuels Bullish Sentiment
On the weekly Relative Strength Index (RSI), Bitcoin is in a bullish position, with the RSI currently above 50 and trending upward. This suggests a bullish trend, with the previous dip below 50 being considered a deviation, another sign commonly associated with bullish trends.
Switching to the daily timeframe, the technical analysis remains bullish. Bitcoin’s price has broken out of a descending resistance trendline, indicating that the previous correction may be over. BTC is currently trading within the 0.5 to 0.618 Fibonacci retracement resistance zone, ranging from $28,350 to $29,150.
The key determinant of the future trend will be whether Bitcoin manages to clear this resistance zone or faces rejection. If it successfully surpasses this level, the price could increase by approximately 10% to reach the yearly high near $31,450.
Bitcoin’s September Gain and Strong October Start: What the Technical Analysis Reveals
However, in the event of rejection from the 0.5 to 0.618 area, Bitcoin’s price may experience a 7% decline, taking it down to the descending resistance line at $26,500.
Overall, the technical analysis suggests a positive outlook for Bitcoin’s price, with the potential for further gains if it can overcome key resistance levels. However, it’s essential to monitor price movements and key levels closely for potential reversals or setbacks.