Bitcoin (BTC) was unable to break the so-called curse of September, as its price fell just over 7% on the month despite a strong recovery spike just before its close. Nonetheless, Bitcoin appears to be making a comeback in October, a month known for painting aggressive bullish reversals.
Bybt data shows that Bitcoin has closed October in gains most of the time since 2013, with a success rate of more than 77%. Last year, the cryptocurrency surged 28% to hit levels above $ 13,500 after ending September at around $ 10,800, following an approximate 7.5% decline.
Bitcoin’s monthly returns since 2013. Source: Bybt
Similarly, Bitcoin had risen more than 10% at the end of October 2019 despite having fallen around 14% in the previous month. That made September feel like a sell-off month for traders, with their record loss posted seven out of nine times since 2013.
By contrast, October was featured as a dip buying period, suggesting that traders may end up raising the price of Bitcoin by October 31st.
The October fractal is coming to the surface despite alarming signs in the form of China’s intensifying crackdown and the United States’ tougher regulatory stance on the cryptocurrency sector.
Furthermore, the prospects of the Federal Reserve limiting its $ 120 billion-a-month bond buying program later this year appears to have been limiting Bitcoin’s bullish outlook. Loose monetary policy, combined with near-zero interest rates from the US central bank, was instrumental in driving Bitcoin’s price rally from under $ 4,000 in March 2020 to nearly $ 65,000 in April. 2021.
But despite short-term setbacks, a number of key indicators revealed that investors still want exposure in the burgeoning crypto space.
Crypto data tracking service CryptoCompare noted in its report that volumes associated with digital asset investment products increased 9.6% in September. Meanwhile, weekly product entries rose to $ 69.7 million, the highest since May 2021.
“Bitcoin-based products saw the highest level of inflows of any asset, averaging $ 31.2 million per week,” CryptoCompare wrote, adding that “there could be upside in the final quarter of 2021.”
Average weekly net inflow per asset for the month of September. Source: CryptoCompare
The 20-week EMA fractal
Technical indicators were also pointing to a bullish session ahead for Bitcoin as it formed a base around $ 40,000 before the close of September and recovered key resistance levels as interim support. That included the 21-week exponential moving average that defines the bias (21-week EMA).
As Cointelegraph previously covered, a drop below the 21-week EMA increased the likelihood of Bitcoin continuing to decline by 78%. On September 27, the cryptocurrency fell below the green wave (as shown in the chart below) but regained it as support upon entering the October session.
BTC / USD weekly price chart with bullish runs centered on the 20-week EMA. Source: TradingView
A move above the 20-week EMA, accompanied by rising volumes, has historically led to explosive bull runs on Bitcoin. As a result, if the fractal repeats, the price of BTC may head towards a new high in the coming sessions.
Bull pennant break
Another technical indicator that has been predicting a bullish result for Bitcoin is the bullish pennant.
Related: Analyst Achieves Bitcoin Monthly Close 2 Months In A Row – His October Target Is $ 63K
In detail, the price of BTC has been consolidating within two converging trend lines following its rally of over 500%.
Traditional analysts see these sideways movements as a bullish continuation signal. In doing so, they anticipate that the price will break above the pattern’s upper trend line and rise by as much as the length of the previous uptrend, called the flagpole.
Bitcoin weekly price chart with bullish pennant structure. Source: TradingView
As a result, Bitcoin’s path of least resistance appears to be to the upside, with a possible breakout move looking to send its prices towards $ 100,000 (the height of the flagpole is roughly $ 50,000).
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