Welcome readers and thanks for subscribing! The Altcoin Roundup Newsletter is now created by regular Cointelegraph newsletter contributor Big Smokey. In the coming weeks, this newsletter will be renamed Crypto Market Musings, a weekly newsletter that provides forward-looking analysis and keeps track of emerging trends in the crypto market.
The publication date of the newsletter will remain the same and the content will continue to focus heavily on the technical and fundamental analysis of cryptocurrencies from a more macroeconomic perspective to identify key changes in investor sentiment and market structure. Hope you enjoy!
Time to go long?
Bitcoin this week
) price returned up to $21,000 on October 26. This has led several traders to say that a bottom may be about to hit or that BTC is entering the next phase of a technical structure such as a Wyckoff, a range or something like that. a kind of coup resistance resistance.
Before moving on to bullish sentiment and 10x long positions, let’s go back to the previous analysis to see if anything has changed in the structure of the Bitcoin market and if the recent increase in bullish momentum indicates a broader trend reversal.
When the last update was released on September 30, Bitcoin was trading around $19,600, which is still within the last 136 days of price action. At the time, I identified bullish divergences in the weekly Relative Strength Index (RSI) and Moving Average Confluence Divergence (MACD). There were also several potential bottom signals coming from several network indicators that were at multi-year lows.
Let’s see how things are now.
Bollinger bands are narrow
The Bollinger Bands on the daily chart remain tight, and this week’s rally to $21,000 was the expansion or increase in volatility that most traders expected. As usual, after breaking the upper limit, the price pulled back to test the midline/midband (20MA) as support.
Despite the strength of the move, the price remains capped below the 200-MA (black line) and it is not clear at this point whether the 20-MA will now serve as support for the Bitcoin price.
BTC/USD Daily Chart with Bollinger Bands. Source: TradingView
After retracing the near low of 25.7, the weekly RSI continues its uptrend and the bullish divergence identified in the previous analysis remains in place. A similar trend is observed in the weekly MACD of BTC.
On the same chart, we can see that the last weekly candle is on its way to making a weekly higher high. If the candle closes above the high of the previous five weeks and the price continues in the coming weeks with a daily or weekly close above $22,800, this could be the beginning of a trend reversal.
Weekly BTC/USD Chart. Source: TradingView
On the daily time frame, the BTC indicator with multiple moving Guppy averages (GMMA or Super Guppy) is surprising. Short-term moving averages contract and they converge with long-term moving averages, which usually indicate an impending directional move or, in some cases, a macro trend reversal.
BTC/USD Daily Chart. Source: TradingView
Over the past few weeks, Bitcoin’s “record low volatility” has been the talk of the town, and when using Bollinger Bands, GMMA and BVOL, the shrinking price range suggests expansion, but in what direction remains a mystery.
Bitcoin has traded in a range of $18,600 to $24,500 for 36 days, and in terms of technical analysis, the price remains near the middle of this range. The move to $21,000 did not lead to a significant increase in the daily high, nor did it break out of the current range, which is essentially a sideways bounce.
The price is holding above the 20-day moving average so far, but we have yet to see the 20-MA cross above the 50-MA and much of the October 26 rally has returned to the $20,000 lows.
BTC/USD Daily Chart. Source: TradingView
A more compelling development would be for Bitcoin to break out of the current range block to test the 200-MA at $24,800 and eventually make an attempt to turn the moving average towards support.
Extending further into the $29,000 to $35,000 range will bring confidence to bulls looking for clearer signs of a trend reversal. Until that happens, the current price action is just a big consolidation held by resistance extending to $24,800.
Related: Why is the Crypto Market Growing Today?
Bitcoin network data says it’s accumulating
Same as spot price B