As Bitcoin recovers to 27,000, the road to 30,000 is still full of obstacles; currently there are more and more applicants for Bitcoin ETFs, and Bitcoin is about to be "halved" again. Will the cryptocurrency market usher in a similar trend as the U.S. stock market in the fourth quarter?
The SEC’s decision to delay multiple spot Bitcoin exchange-traded fund (ETF) applications early also did not dent prices — a sign that market participants are taking a longer-term view of Bitcoin. Bloomberg ETF analyst James Seyffart believes the regulator made the decision early because of a potential U.S. government shutdown on Oct. 1.
Fundamental analysis of cryptocurrencies
Bitcoin has performed well over the past few weeks amid a broad range of uncertainty and risk aversion in the market. The view that interest rates will remain high for a long time has not had any substantial impact on cryptocurrencies; both Bitcoin and Ethereum prices have risen this week.
The recent weakness in the U.S. dollar has helped the cryptocurrency market. Bitcoin rose about 3% yesterday and tested downtrend support. Ahead of the possibility of another Bitcoin "halving" next year, cryptocurrency enthusiasts have been preparing for a bull run in the fourth quarter. From a historical perspective, cryptocurrencies have struggled in the fourth quarter for the past three years, which begs the question: Are we experiencing a cryptocurrency revolution?
Judging from recent developments in the overall market, there seems to be a general sense of fear at the moment. As we head into the fourth quarter, many cryptocurrency enthusiasts see continued higher interest rates as a threat. This is because higher interest rates could mean that market participants may choose to buy U.S. Treasuries instead. Under current conditions, the risk-reward ratio of U.S. Treasuries is more favorable, but it could put pressure on risky assets and cryptocurrencies.
Higher interest rate levels will also affect consumer spending, reducing the amount of discretionary disposable income, which could hurt the retail sector of cryptocurrencies. The chart below does a good job of illustrating the current levels of fear and greed among cryptocurrency participants.
Bitcoin Price Analysis
After a few days of struggling, the bulls finally pushed Bitcoin above the moving averages on September 29. The bulls are currently attempting to fend off the bears’ attempts to pull the price back below the 20-day exponential moving average ($26,534).
The moving averages are on the verge of a bullish crossover and the relative strength index (RSI) is in the positive territory, suggesting that the path of least resistance is to the upside. There is a minor resistance at $27,500, but it is likely to be crossed.
Later, the BTC/USDT pair is likely to rebound towards the overhead resistance at $28,143. This level is likely to witness a tough battle between the bulls and bears once again.
On the downside, the $26,000 level is worth watching. If this level gives way, the advantage will tilt in favor of the bears. The pair could subsequently plummet to the strong support of $24,800.
Ethereum Price Analysis
It climbed and closed above the 20-day EMA ($1,622) on September 29, which showed that the selling pressure was easing. Buyers continued to buy and cleared the hurdle of the 50-day simple moving average ($1,660) on September 29.
The bulls will try to push the price to the overhead resistance at $1,746. This is an important level to watch because if the buyers overcome this hurdle, the ETH/USDT pair will complete a double bottom pattern. This reversal setup has a target objective of $1,961.
Conversely, if the price turns down from $1,746, it will suggest that the bears are still selling on rallies. The price could then drop to the 20-day EMA. If the price rebounds off this support, it will strengthen the prospects of a rally above $1,746. The bears will re-enter the market if they pull the price back below the 20-day EMA.
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Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
Agency: Kepler Research
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