Is bitcoin history repeating itself? 3 indicators suggest that October will rekindle the BTC bull market
Bitcoin (BTC) failed to break what is known as the September curse as its price fell a little more than 7% in the month despite a strong rebound just before the close of trading. Nonetheless, Bitcoin appears to be making a comeback in October, a month known for painting aggressive uptrends.
Bybt data shows that Bitcoin has closed October most of the time since 2013 with a profit – with a success rate of over 77%. Last year, the cryptocurrency surged 28% to levels above $ 13,500, after ending at around $ 10,800 in September, after falling about 7.5%.
Bitcoin monthly returns since 2013. Source: Bybt
Similarly, Bitcoin climbed over 10% higher by the end of October 2019, despite having fallen around 14% the previous month. That made September look like a month of sales for retailers, with losses recorded seven out of nine times since 2013.
In contrast, October turned out to be a time of dip buying, suggesting that traders may push the price of Bitcoin higher by October 31st.
The October fractal is emerging despite alarming signals in the form of China’s more intense crackdown and the United States’ stricter regulatory stance on the crypto sector.
Additionally, the prospect of the Federal Reserve capping its $ 120 billion monthly bond purchase program later this year appears to have limited Bitcoin’s upside. The loose monetary policy, combined with the US Federal Reserve’s interest rates close to zero, played a major role in pushing the price of Bitcoin from under $ 4,000 in March 2020 to nearly $ 65,000 by April 2021.
But despite the short-term setbacks, a flurry of key indicators shows that investors still want exposure to the booming cryptocurrency space.
Crypto data tracking service CryptoCompare found in its report that volume related to digital asset investment products rose 9.6% in September. Meanwhile, weekly product inflows rose to $ 69.7 million, the highest since May 2021.
“Bitcoin-based products recorded the highest inflows from any asset at an average of $ 31.2 million per week,” wrote CryptoCompare, adding that “could see an upward trend into the final quarter of 2021.”
Average weekly net inflow by assets for the month of September. Source: CryptoCompare
The 20 week EMA fractal
Technical indicators also pointed to a bullish session for Bitcoin as it formed a base of around $ 40,000 ahead of September’s close and regained key resistance levels as preliminary support. This also included the 21-week exponential moving average (21-week EMA) that defines the bias.
As Cointelegraph noted, a drop below the 21-week EMA increased Bitcoin’s likelihood of falling further 78%. On September 27, the cryptocurrency fell below the green wave (as shown in the graph below) but regained it as support when it entered the October session.
BTC / USD weekly price chart with 20-week EMA-focused bull runs. Source: TradingView
Movement above the 20-week EMA accompanied by rising volumes has resulted in explosive Bitcoin bull runs in the past. As a result, BTC price could be heading for a new record high in the coming weeks if the fractal repeats itself.
Bull pennant outbreak
Another technical indicator that predicts a bullish outcome for Bitcoin is the bull pennant.
Related: Analyst hits Bitcoin month-end 2 months in a row – His October target is $ 63K
In detail, after its 500 percent rally, BTC’s price has consolidated within two converging trend lines.
Traditional analysts view these sideways moves as a sign of a bullish continuation. In doing so, they assume that the price will break above the upper trend line of the pattern – and rise by the length of the previous upward trend, the so-called flagpole.
Bitcoin weekly price chart with bull pennant structure. Source: TradingView
As a result, Bitcoin’s path of least resistance appears to be on its way up, with a possible breakout move aimed at propelling its prices towards $ 100,000 (the flagpole is approximately $ 50,000).
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