Despite a significant rebound, Bitcoin might face the harsh reality of the price position and the Chikou Span below the Kumo cloud. The bulls might defeat the bears, as there have been no higher highs than previous ones.
This week has been very busy for all risk asset classes, particularly equity indexes. Despite the disappointing results of the GAFAM, the latter made investors feel optimistic by closing Friday’s session in style.
The month-end effect might explain this change without simply prejudging price manipulation in financial markets. October could end in the best way, erasing the disasters occurring in August and September.
Although Bitcoin (BTC) recently rose above USD 20,000 again, nobody knows whether it will favor the bears or the bulls. While a confrontation between the two camps seems to be arising, the next Fed meeting might be a turning point.
The Weekly Price of Bitcoin Reaches the Tenkan
A weekly bullish candlestick above the USD 20,000 support allowed Bitcoin to reach the Tenkan line after breaking the descending line of the bearish run. The bulls regain hope, although that optimistic technical signal remains timid compared to the Kumo future cloud heading into the first quarter of 2023.
If the price of BTC breaks above the Tenkan, it may validate a USD 20,000 throwback. Although that would allow the Chikou Span to do the same, its chances of rallying toward the USD 26,000 resistance would increase.
In addition, it would lead to a double bottom if it took place ideally; reminding investors it is a bullish chart pattern. The price would have to recover by over 20% at this time to make it possible.
Despite the possibility of a more significant rebound, Bitcoin might face the harsh reality of its price position. Besides, the Chikou Span has remained below the Kumo cloud for many months. Those technical signals might weigh heavily in neutralizing the bearish run of Bitcoin since its last all-time high in November.
The Daily Price of Bitcoin Re-Enters the Kumo
Since the price of Bitcoin returned above USD 20,000, it finally re-entered the Kumo daily, paving the way to USD 22,000. If the rebound attempt gained momentum by breaking that resistance, it would be above the cloud alongside the Chikou Span.
That has led to the hypothesis that the pioneering cryptocurrency would have something under its feet to climb higher. The goals would undergo adjustments that make that possible, depending on what will happen in weekly units.
A pullback below USD 20,000 would drive the price of BTC and the Chikou Span below the Kumo. Since the bears target the USD 16,000 and USD 12,000 supports, the market environment might turn around again.
Bitcoin might have a third wave of correction since its last all-time high in November, indicating bullish capitulation. In other words, the bulls might slowly outperform the bears in this confrontation that has just started.
However, Bitcoin is still in its bearish market after its last all-time high. Since there are no higher highs than previous ones, the beginning of a defeat of the bears might occur.
Due to the recent rise in risky asset classes, investors will watch the Fed meeting in November. They anticipate a possible transition from a tight monetary policy to a more accommodative one.
By Alexander Salazar
