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The cryptocurrency market, especially Bitcoin (BTC) and Ethereum (ETH), is going through a relatively stagnant period. Last week, Bitcoin struggled to stay above the $26,000 support level after rejecting a drop to $25,000. This relatively inactive market can be attributed to the lack of liquidity and the indifference of individual investors who are afraid to sell as the price falls below the $25,000 support.
Bitcoin Price Outlook
The daily chart indicates the formation of a possible rectangle pattern that could lead to a breakout towards $37,746. However, due to the weak market structure, a small dip is necessary to confirm the $25,000 support and gather liquidity before breaking the rectangle pattern.
The 200-week Exponential Moving Average (EMA) (purple) is currently positioned at $56,606 to alleviate selling pressure and limit the need to push Bitcoin below $25,000.
Analysts and traders have different opinions on the next direction for Bitcoin. For example, a prominent figure on Twitter, Rekt Capital, recently stated, “BTC positioned itself for a weekly close below the bull market support band that the price rejected, but above ~$26,000.”
In another update, the trader stated:
Bitcoin has since dropped below the $26,000 support. However, this does not change the possibility of potential upside wicks beyond the Lower High resistance if there is a ~10% October return like in 2019. It just changes the peak price point of such a move, which would be around ~$28,710 from current prices.
Historically, August and September are the months with the lowest liquidity, but October seems to be a potentially positive month for Bitcoin, according to Rekt Capital. Moreover, the chart shared by Rekt Capital shows many similarities between 2019 and 2023, suggesting that Bitcoin’s price could rise by 10% to $29,200 only in October.
In such a scenario, traders may expect Bitcoin to form a long wick above the resistance shown in yellow on the chart before confirming its movement as a bullish rally.
Will Bitcoin Rise?
Looking at the weekly chart, Bitcoin’s price is currently above the two moving average indicators of the bull market: the 21-week EMA (red), the 100-week EMA (blue), and the 200-day EMA. However, this negative outlook, combined with the sell signal from the Moving Average Convergence Divergence (MACD), could confirm the passage from the $25,000 support before a potential rise towards $30,000.
A continuation of the movement below the primary support at $25,000 could significantly harm the expected bull market. It could also lead to panic selling and increased selling pressure. A small dip below $25,000 could turn into a fully developed sell-off down to $22,000, and if a movement towards this level occurs, it could retest $20,000 before another significant upward movement starts.
