October Close May Prove Decisive for Bitcoin Price

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Bitcoin’s monthly close today may reveal the cryptocurrency’s directional bias after a long period of low volatility.

Notably, things may get tougher for BTC if prices fail to defend the 21-month exponential moving average (EMA), currently at $6,108, as the EMA has been acting as a strong support since June.

This is evident from the fact that price pullbacks witnessed in June, July, and September had ended near the EMA.

Further, occasional dips below the key EMA support have been short-lived. For instance, BTC fell to a low of $5,900 on Aug. 15. Back then, the 21-day EMA was located at $6,042. However, by month’s end, BTC was sitting comfortably above the crucial support. The cryptocurrency breached the EMA support on Oct. 11 but made a quick recovery to $6,800 on Oct. 15.

The price action is telling that the bears have likely run out of steam and the cryptocurrency may have carved out a bottom close to $6,000. Similar sentiments were echoed recently by the likes of billionaire investor Novogratz and Fundstrat’s Tom Lee.

However, that argument would lose credence if prices close today below $6,108, signaling a resumption of the sell-off from the record highs reached in December last year.

Monthly chart

As can be seen, the 5-month and 10-month EMAs produced a bearish cross last month for the first time since 2014, meaning the bears are already in control here.

Hence, a close below the 21-month EMA will likely prove costly.

The prospects of a bullish reversal above $7,400 (September high) would improve if BTC defends the EMA support for the fifth month straight.

View

  • A bearish close below the 21-month EMA may allow a drop to levels below the June low of $5,777.
  • A defense of the crucial support would be encouraging, however, a bullish reversal would be confirmed only if cryptocurrency puts an end to a series of lower highs by moving above $7,400.
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Source: https://www.coindesk.com/october-close-may-prove-decisive-for-bitcoin-price/


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