Crypto Technical Analysis Report | 06th-October-2023

Crypto Technical Analysis Report | 06th-October-2023

Bitcoin (BTC) made slight gains on Wednesday, rising by 1.3% over the past 24 hours. This increase occurred as traditional markets saw some relief from headwinds, and the crypto markets stabilised following Monday’s sharp rally. BTC was trading at approximately $27,700 during the U.S. afternoon hours. Earlier this week, it briefly surpassed $28,000 before retracing some of its gains. The S&P 500 index closed the day with a 0.8% gain, while the tech-heavy NASDAQ 100 index posted a 1.45% gain. Among major crypto assets, Avalanche’s AVAX was a top performer, surging by 7%. XRP also experienced a rally of over 3%, driven in part by Ripple’s Asian arm obtaining a licence in Singapore and a favourable court ruling.

On October 2nd, Bitcoin experienced a notable intraday gain of 5.5%, reaching $28,600. However, this surge lost momentum, primarily because the highly anticipated launch of Ether futures exchange-traded funds (ETFs) failed to generate significant trading volumes. Although the recent rally towards the upper boundary of the current price range may have provided some encouragement to investors, recent statements from representatives of the United States Federal Reserve expressed ongoing concerns about a potential economic downturn. Bitcoin did demonstrate short-term strength by holding support at $27,200 on October 3rd and subsequently rising above $27,500 on October 5th. Nonetheless, three key trading metrics suggest a rather lacklustre level of support. These metrics encompass spot market volumes, derivatives, and confidence in the approval of a spot Bitcoin ETF. The BTC futures premium is still trading below the 5% neutral threshold, indicating a neutral-to-bearish sentiment. This suggests that there’s currently limited demand for leveraged long positions in the Bitcoin futures market. Furthermore, trading activity in the spot market on traditional exchanges has dropped to levels not witnessed since late 2020. This decline in activity suggests reduced participation by institutional investors in the Bitcoin market.

Ether faced a strong rejection from the $1,746 resistance level on October 2, indicating significant bearish pressure at that price point. The 20-day EMA ($1,640) has flattened out, and the RSI is hovering around the midpoint, suggesting a balance between supply and demand. While the introduction of several Ethereum Futures ETFs this week generated much anticipation, their launch resulted in underwhelming flows, with just under $2 million invested in Ether Futures upon their debut on October 2.

On the macro front, on 3rd October the real yield on U.S. 10-year Treasuries, which takes inflation into account, rose to 2.47%. This is the highest level it has reached in almost 15 years. This increase in real yields is one of the factors contributing to the U.S. Dollar Index (DXY) reaching its highest level in 10 months. And over the past 15 days, the United States, the largest economy globally, has experienced a significant increase in its debt. After surpassing the $33 trillion mark two weeks ago, the country’s debt has continued to rise, adding an additional $500 billion during this period. A recession in 2024 is becoming more likely, with the Federal Reserve’s data suggesting odds of nearly 60% in September. This comes as bond yields experience a rapid increase in a phenomenon known as “bear steepening.” 

Technical Outlook:

Bitcoin:

Bitcoin after testing the crucial support level of $25,000 (Horizontal Trendline & 50% Fibonacci Retracement Level) has witnessed a relief rally and the prices went up to $28,580. The asset broke the downsloping trendline. However, it failed to break the resistance of $28,500. Currently, BTC is consolidating in a range from $28,000 to $27,000. Once it breaks and sustains the $28,500 mark it may further go up to $32,500. To witness a rally, BTC needs to break, close and sustain above the key resistance level of $32,500.

Ethereum:

ETH was trading sideways in a range from $1,550 to $1,650. The asset gave a breakout above the range and rallied up to $1,751. However, the bulls failed to break the long-held resistance of $1,750 (Horizontal Trendline & 50% Fibonacci Retracement Level) and witnessed some profit booking as the prices dropped to $1,609. Once ETH breaks, closes and sustains above $1,750 then it may further rally up to $1,875 – $2,000 levels. The asset has a strong support zone from $1,535 to $1,500 (78.6% Fibonacci Retracement Level & Horizontal Trendline). A break below the support may lead to further downfall.

BNB:

BNB after breaking the long-held support of $220 dropped and made a low of $203.4. The asset made a ‘Morning star’  pattern at the low. However, the bulls are struggling to break the crucial resistance level of $220. Once it breaks, closes and sustains above $220 then we can expect it to further rally up to $250-$255.

Weekly Snapshot:

Market Updates:

• Visa executive Akshay Chopra reveals that the company’s partnerships with crypto exchanges have facilitated around $3 billion in payment volume with about 71 crypto tokens.
• Stars Arena user Lilitch.eth discovered the exploit on Oct. 5 and announced it on X, claiming that over $1 million was lost. Stars Arena said the attack only resulted in approximately $2,000 in losses and that the exploit had been patched.
• United States-based exchange Kraken has announced a pending deal to acquire Netherlands-based crypto exchange Coin Meester B.V. (BCM) as it sets its sights on European expansion.