October Bitcoin Analysis

Bitcoin Technical Analysis

Key technical indicators and observations

Don't miss our article on technical analysis that will give you the necessary information to enlighten you.

  • Current price (28.10.2019): $9’325
  • Closest Support / Resistance level: $9’000 / $10’000
  • Change in price (monthly): +12.4%
  • Change in price (since January 1st): +177%
  • Change in volume (monthly): -3%
BTC/USD (weekly): RSI(14), 20 and 200 days moving average, descending triangle, RSI(14), and volume. (Source: tradingview.com)


  • After the September crash, the price hardly stabilised above $8,000. Indeed, despite a fake rally that saw the price of bitcoin test the $8800 resistance, the price rebounded several times on the support at $7700. Generally, the more a level is tested, the greater the probability that it will break.
  • This is what happened when the price dropped below the 20-day moving average for the nth time: significant sales pressure was observed and the price fell below the key support to 7700 to dangerously test the $7100. All indicators tended to suggest that the $6,000 region was close.
  • At the beginning of October, we even saw the 200-day moving average cross the 20-day moving average, confirming a long-term downward trend.
  • While most traders had short positions on Bitcoin, China officially announced that it will promote blockchain technologies while it had been reluctant until now. This news caused a large volume of purchases that saw a lot of leveraged positions close and thus induce a significant price increase. In a few hours, the price of Bitcoin skyrocketed from $7,500 to $10,500.
  • At the same time, blockchain and Bitcoin searches have exploded on Google in China and Chinese altcoins have increased significantly (such as Tron or Neo).
  • Despite this explosion in buying volume, the price has found resistance at the trend line on the graph below and is currently stabilised above $9300.
  • A remarkable and rare fact that is observed only during violent movements: the price is currently above the 200-days moving average and the 20-days moving average while the 20-days moving average is below the 200-days moving average.

What could we expect for the future?

The next few days and weeks will be extremely exciting to follow? How will the West react to this announcement? What is China's real position? Is this position in line with the blockchain philosophy of decentralisation?

At the price level, it is critical that the price stabilises at the current level and that purchasing pressure is maintained. A sign that would be extremely bullish would be the passage of the moving average of 20 days above that of 200 days (two indicators monitored by traders) and would indicate a very rapid trend reversal. Most observers are focused on these trend lines to make their choices. A crossing between these lines would, therefore, be beneficial and a break would probably see the price explode above $10,500. On the other hand, a violent correction could be observed if the current pressure was only punctual and the excitement quickly subsided. In this scenario, current supports may suffer.

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Glossary

  • Moving Average (MA): Trend-following indicator derived from the simple average of the prices on a given time period (for example 20 days).
  • Support/Resistance: Levels where the prices will tend to stop and could probably reverse its trend. A support level will likely tend to stop the prices dropping while resistance is a level where the selling pressure is higher and will likely stop the price rising. Once a support or resistance level are reached, the price will bounce back or break through the level and continue his actual trend.

Disclaimer: The information on the Bitcoin Analysis is not targeted at the general public of any particular country. It is not intended to be distributed or used by residents of any country where such distribution or use would contravene any local law or regulatory requirement.

Any analysis, opinion, commentary or research-based material on our Bitcoin Analysis is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our Bitcoin Analysis are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our Analysis (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

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