Bitcoin secured a long-awaited bullish weekly close after holding above its critical 200-week simple moving average (SMA), according to crypto chartist JT. However, she cautions that BTC still faces major resistance on the path to confirming an upward trend reversal.
While closing above the 200-week SMA provides a preliminary win for bulls, Mags notes that Bitcoin failed to surmount horizontal resistance at $28,200. This prior support-turned-resistance level remains a formidable barrier. However, in the early morning CET times on October 2nd, Bitcoin broke strong $28,200 resistance and is currently trading at $28,430 with a 4.5% surge in the last 24 hours.
Analyzing technical oscillators, Mags points out that Bitcoin is forming lower highs on the stochastic RSI and weekly RSI, creating a bearish divergence. To negate this pattern, BTC must break above these downtrend lines and avoid another lower peak.
She also highlights a potential head and shoulders topping pattern on the weekly chart, with scope for the right shoulder to take shape if Bitcoin falters at resistance. However, Mags stresses that the bullish monthly close should take precedence over developing bear signals on lower timeframes.
In summary, while Bitcoin is making tenuous progress on the weekly scale, Mags contends the uptrend remains in a delicate state. Key levels must be reclaimed to invalidate growing signals of bearish momentum. She concludes that a decisive year-end rally is still the higher probability outcome, but urges observers to stay vigilant of both bull and bear scenarios.
With Bitcoin at a precarious technical juncture, the coming weeks will prove pivotal in determining if bulls can flip the market structure decisively in their favor. According to Mags, the odds still favor such an outcome, but the possibility of bears retaining control cannot yet be discounted.
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