BTC shows Reversal Signs
Over the weekend, BTC/USD started the session by sliding from $43,000 to $40,700. Shortly after, the coin witnessed a bullish engulfing candle that stopped the sell-off in its tracks.
Notably, the slide in prices came just as it was revealed that Huobi exchange would no longer offer its services to users from mainland China due to another regulatory crackdown. The latest crackdown came as one among many policies peddled by the Chinese regime, which also banned cryptocurrencies yet again that same week amidst a spiraling property crisis triggered by Evergrande’s ongoing insolvency issues.
The aforementioned ban was picked up by Bloomberg and other mainstream news outlets — and regurgitated wholesale — despite there being no actual news, causing no small amount of fear, uncertainty, and doubt.
As this concoction of bad news and worse reporting came to fruition, the BTC/USD outlook appeared grim.
However, the technical outlook has since changed after the proverbial ‘nail in the coffin’ failed to cause a cascading sell-off. Instead, the market rallied after news regarding the Huobi exchange became widely known. The announcement was followed by a 44% nosedive in Hong Kong stock.
As noted on Twitter and on the telegram channel, the Chinese FUD was likely part of a final shakeout aimed at fleecing new participants.
At the time of writing, Bitcoin exchanges hand at $43,800 — nearly 2% above the opening weekend trading prices. From a technical point of view, BTC/USD has coiled up within a bullish descending wedge pattern — the targets of which are $48,000 and $52,800, respectively, depending on how one plots the structure.
What could a Bullish Q4 look like?
As you are aware, I’ve been quite vocal about a $100,000 bitcoin by the end of the year and a $200,000 — $300,000 bitcoin price by the middle of next year.
Technically, BTC/USD closed the weekly candle around the 20-weekly EMA at $43,150. While this is slightly below the moving average, it is within the acceptable margin of error and gives bulls another week to dictate the next steps for bitcoin.
Bitcoin would need to begin grinding to higher prices this week, as failed bullish patterns can have a devastating effect on market structure.
That said, should prices begin to accelerate, then a potentially early run-up to all-time highs could see BTC/USD trading at all-time highs by November.
- $43,000 LTF support break suggests prices remain within the wedge (around $40,000)
- $44,200 LTF Resistance break suggests move to $48,000 & $52,800 respectively
Bulls lead the way.
Catch you later.
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