FOMC Meeting on Horizon, Will Bitcoin Form New Lows in September as Bearish Death Cross Haunts the Rally
Bitcoin price appears to be poised to hold above the crucial support zone between $18,800 & $18,200. As Coinpedia reported earlier, the BTC price continues to trade along the neckline of the lower support, intending to rebound finely in the coming days. However, the latest trade-set up flashes huge bearish signals as the price is expected to slice through these levels and register new lows very soon.
The 200-week MA is considered one of the important levels and the BTC price has been constantly failing to regain above these levels. Moreover, the unusual death cross is expected to occur in the next couple of days which could slash the price harder.
As seen in the chart, the BTC price has not tested the 200-WMA more frequently in the recent past. The test happened only a few times in history while the price was busy marking the bottoms of the bearish cycle. On the previous occasions when the price contacted the 200-WMA levels, it bounced off firmly and surged with magnificent numbers.
However, it is slightly diverse now as the asset has markers nearly 10-weekly candles below the crucial 200-WMA levels. Therefore, the probability of a rebound diminishes as the asset is preparing for a massive downswing.
The Bitcoin price is witnessing the first ever Death cross led by a cross of 20-WMA & 200-WMA levels. The 20-WMA levels have crossed the 200-WMA and heading towards the south. While the drop is not yet confirmed, a bearish close for the current week may validate the formation.
Since its inception, the 20-WMA levels traded close to the 200-WMA but never cross the levels. However, if the Bitcoin(BTC) price registers a rebound then the bearish formation may be invalidated. On the darker side, a huge plunge may be expected if the formation is validated which may drag the price below $15000 or even test the levels below $10,000 too.
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Bitcoin Long Trades Pile Up While Surging DXY Index Haunts the BTC Price Rally – Coinpedia – Fintech & Cryptocurreny News Media
The dominant crypto, Bitcoin has been trading within bearish captivity for nearly 15 to 20 days and hence was expected to break the trend very soon. In the past couple of days, the price has been trying to surge above the immediate resistance. However, the current trade set-up denotes that the bulls have stepped out as the bears mark their strong presence.
Investors Bullish on Bitcoin
While the upcoming trend of the BTC price has become pretty unpredictable, more traders are confident of the asset pulling a significant leg up. Hence the volume of long trades has recently outperformed the short trades on Binance futures.
The data above displays the volume of the long trades & short trades in the past week. Despite the shaky price trend, the investors placed their bets on Bitcoin long more than shorts. As of September 01, nearly 67.59% of trades on Futures are long while 32.41% are short. Therefore, the possibility of the BTC price surging above $21,000 emerges, which may be followed by a notable drop.
Strengthening of DXY Index – A Bearish Case for Bitcoin
Conversely, the DXY Index, which determines the strength of the US Dollar is coiling up. After a minor rejection from 20-year high levels at 109.99, the asset failed to continue to remain within bearish captivity. Hence the Index, since the early trading hours has been extremely bullish, flashing the signals of marking new highs very soon.
The DXY Index is expected to surge slowly yet steadily and may retest the upper resistance in the coming weekend. Further, it may again experience a rejection, which could be reversed in a very short time ahead. In such a case, the Bitcoin price may experience tougher times as the possibility of a significant dump may be imminent.
Considering both cases, it is quite prominent that the descending consolidation of the asset is expected to prevail for some more time. As September month is largely believed to be bearish, the Bitcoin(BTC) price may maintain a low-key trend for a long.