Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin experienced its largest single-day long liquidation this year, leading to a sharp fall that pulled many altcoins below their immediate support levels. The flagship cryptocurrency briefly touched $111,800 on Monday before recovering above $112,700, with analysts pointing to leverage position liquidations as the primary catalyst. Despite the immediate downturn, some market observers maintain a positive outlook for Bitcoin in October, citing historical performance and potential shifts in U.S. Federal Reserve policy.
The severe price drop was largely attributed to a cascade of liquidations. According to CoinGlass, traders faced a staggering $1.62 billion in long liquidations within a 24-hour period, marking the biggest such event of the current year.
However, select analysts are not deterred by the recent volatility. They anticipate that Bitcoin could reverse its trend and charge higher in October. Historical data from CoinGlass indicates that since 2013, BTC has shown price increases in 10 out of 12 Octobers, with the last decline in the month occurring in 2018. If this historical pattern holds, Bitcoin could potentially reach a new all-time high next month.
Further optimism for the broader crypto markets stems from potential shifts in U.S. Federal Reserve policy. Economist Timothy Peterson told Cointelegraph that markets might be underpricing the likelihood of rapid interest rate cuts. He suggests that the eventual surprise effect of these cuts could “jolt Bitcoin and alts up substantially” over the next three to nine months.
Market Overview
The S&P 500 Index (SPX) recorded another new all-time high on Monday, signaling continued bullish momentum. The rally could extend to 6,700, where bears might establish strong resistance. Any price dips are expected to find support around the 20-day exponential moving average (EMA) at 6,550. A rebound from this level and a break above 6,700 could pave the way for a move toward 7,000. Conversely, sellers would need to push the price below the 50-day simple moving average (SMA) at 6,430 to significantly weaken the bullish sentiment.
The US Dollar Index (DXY) rebounded from the 96.37 support level on Wednesday, indicating strong defense by bulls. The recovery is likely to face selling pressure at the moving averages. A sharp decline from these averages could lead bears to attempt to push the index below 96.37, potentially extending the downtrend to 95. Conversely, a decisive break and close above the moving averages would suggest buyers are attempting to form a double bottom at 96.37, with potential recovery targets at 99 and then 100.50.
Top Cryptocurrency Analysis
Bitcoin (BTC)
Bitcoin’s inability to surpass the $117,500 resistance likely triggered selling by short-term investors, which intensified after the price broke below its moving averages. The relatively flat moving averages and a Relative Strength Index (RSI) just below the midpoint suggest near-term range-bound action. Buyers are expected to defend the range’s support at $107,000, as a break below this level could send the BTC/USDT pair toward $100,000. On the upside, a clear break and close above $117,500 would signal a potential bullish comeback.
Ether (ETH)
Ether plummeted below the support line of a symmetrical triangle pattern on Monday, indicating that bears have gained the upper hand. The ETH/USDT pair has reached the $4,060 level, which is anticipated to attract significant buying interest from bulls. Any recovery attempts are expected to encounter selling pressure at the 20-day EMA, currently at $4,442. This bearish outlook would be invalidated if the price turns upward and breaks above the resistance line of the triangle.
XRP
XRP plunged to the $2.69 support level on Monday, signaling bears’ efforts to take control. The long tail on the candlestick, however, indicates aggressive buying at $2.69. For buyers to regain momentum, they must swiftly propel the XRP price above the downtrend line. Conversely, a close below $2.69 would complete a bearish descending triangle pattern, suggesting further downside.
BNB
BNB turned down from its all-time high of $1,083 on Sunday, indicating profit-taking by short-term buyers. The BNB/USDT pair could pull back to the 20-day EMA at $945 if the immediate support at the 38.2% Fibonacci retracement level of $991 fails to hold.
Solana (SOL)
Solana pulled back below its 20-day EMA at $227 and approached its uptrend line, which serves as a crucial support level to monitor closely.
Dogecoin (DOGE)
Dogecoin tumbled below its 20-day EMA at $0.25 on Monday, suggesting that bulls have capitulated. While there is support at the 50-day SMA at $0.23, this level is likely to be breached given the current bearish momentum.
Cardano (ADA)
Cardano’s symmetrical triangle pattern resolved to the downside on Monday, giving bears an advantage. Bulls will likely attempt to push the Cardano price back into the triangle, but they may face strong selling pressure at the breakdown level.
HYPE
HYPE plunged below its 20-day EMA at $52.11 on Sunday, signaling a rush to exit by bulls. The HYPE/USDT pair reached its uptrend line, which attracted solid buying interest from bulls, as evidenced by the long tail on the day’s candlestick.
The cryptocurrency market is currently navigating significant volatility, highlighted by Bitcoin’s recent liquidation event and subsequent recovery. While some analysts anticipate a bullish October for BTC and potential positive impacts from future Fed rate cuts, the immediate outlook for many altcoins remains mixed, with key support and resistance levels being tested across the board.
