bitcoin and some select altcoins look strong in early October, but will the sudden bullish momentum last?
US lawmakers in the House and Senate reached a temporary deal on September 30 and averted a government shutdown for 45 days. This news could have acted as a catalyst for bitcoin (btc)’s strong rally on October 1. Additionally, bitcoin‘s historically strong performance in October could have boosted sentiment further.
The US stock markets are also at an optimal time in October. Data from the Stock Trader’s Almanac shows that the S&P 500 Index (SPX) has resurrected by an average of 0.9% in October, between 1950 and 2021. However, that doesn’t mean bulls can be unconcerned because the stock market withstood one of its worst declines in the Black Monday crash in October 1987.
While a short-term bullish move in the cryptocurrency markets is possible, it is unlikely to start a runaway rally. Higher levels are likely to witness profit booking as the rising US Dollar Index (DXY) could keep the bulls on the edge of their seats.
What are the important overall resistance levels in bitcoin and altcoins that can attract sellers? Let’s analyze the graphs to find out.
S&P 500 Index Price Analysis
The S&P 500 index fell below the formidable support of 4,325 on September 22. This completed a bearish head and shoulders pattern, indicating the start of a downward move.
Typically, the price turns around and retests the breakout level, which in this case is 4.325. That happened on September 29. The neckline of the setup is likely to witness a tough battle between the bulls and the bears.
If the price declines and falls below 4238, it will indicate that the bears are in control. That could accelerate selling and the index could sink to the pattern’s target of 4,043.
Any recovery attempt is likely to face selling to 4,325 and then the 20-day exponential moving average ($4,370). A break above this resistance will be the first sign of strength. The index could then rise to the downtrend line.
US Dollar Index Price Analysis
The US Dollar Index has witnessed a brilliant rise in the past few days. The bulls pushed the price above the overhead resistance of 106 on September 26, signaling the start of a new uptrend.
Sellers attempted to push the price below the breakout level of 106 on September 29, but the long tail of the candle shows solid buying at lower levels. The bulls will try to convert the 106 level into support. If they are successful, the index could rise to 108.
The bears are unlikely to give up easily. They will try to drag the price below 106 and then the 20 day EMA. If they manage to do that, they will catch the aggressive bulls. The index may then decline to the 50-day simple moving average ($103).
bitcoin price analysis
bitcoin broke through the immediate resistance of $27,500 on October 1 and then stretched the rally above $28,143 on October 2. The ease with which $28,143 was achieved shows that more is likely to come.
The bulls will try to push the price towards $31,000, where they are likely to encounter solid resistance from the bears. If the price drops sharply from this level, it will suggest that the btc/USDT pair remains stuck within the wide range between $31,000 and $24,800.
The first support on the downside is $28,143 and then the 20-day EMA ($26,862). If the price falls back below $28,143, it may catch the aggressive bulls. This could take the price to the 20-day EMA. Sellers will have to lower the price below this level if they want to take control.
Ether Price Analysis
Ether (eth) broke the 50-day SMA ($1,652) on September 29 and followed it up with another strong rally on October 1. That pushed the price to the overhead resistance of $1,746.
The 20-day EMA ($1,644) has appeared and the Relative Strength Index (RSI) is above the 64 level, indicating that the bulls are in control. That improves prospects for a rally above $1,746. If that happens, the eth/USDT pair will complete a double bottom pattern. This setup has a target of $1,959.
Sellers will do everything to stop the recovery at $1,746. They will have to drag the price below the moving averages to weaken the positive momentum. The pair may then extend its stay within the range for some more time.
BNB Price Analysis
BNB (BNB) rejected the 50-day SMA ($216) on September 29 and 30, but found support at the 20-day EMA ($214). This suggests positive sentiment where dips are being bought.
The moving averages are on the verge of a bullish crossover and the RSI is in positive territory, indicating that the bulls have the upper hand. A break and close above $220 will suggest the start of a new uptrend. The BNB/USDT pair could rise first to $235 and then to $250.
Contrary to this assumption, if the price turns down from $220, the bears will again try to push the pair below the 20-day EMA. If they succeed, it will indicate that the consolidation may extend for a few more days.
XRP Price Analysis
XRP (XRP) rose above the symmetrical triangle pattern on September 29 and the bulls retested the breakout level on September 30. This suggests that the bulls are back in the game.
Next, buyers will try to push the price towards the overhead resistance of $0.56. This is an important level to keep an eye on because a rally above it could signal the start of a new uptrend towards the pattern target of $0.64.
On the other hand, if the price drops below $0.56, it will suggest that the bears have not given up and are continuing to sell on rallies. That could restrict the XRP/USDT pair within the range between $0.41 and $0.56 for a while longer.
Solana Price Analysis
Solana (SOL) broke above the overhead resistance at $22.30 on October 1, indicating that the bulls are making a comeback.
The strong bullish move has pushed the RSI into the overbought space, suggesting that the rally could soon face resistance. The bears may try to stop the recovery at $25.50 and then again at $27.12. If the price turns down from this level, it will indicate that the range of $14 to $27.12 remains intact.
The important support to watch on the downside is the 20-day EMA ($20.50). Sellers will have to push the SOL/USDT pair back below this level to weaken the bullish pace.
Related: btc Price Hits $28.5K as Trader Says bitcoin ‘Stinks of Disbelief’
Cardano Price Analysis
Cardano (ADA) shot above the downtrend line and the 50-day SMA ($0.25) on October 1, invalidating the developing bearish descending triangle pattern.
Generally, the failure of a bearish setup is a positive sign, as the bulls who have been waiting on the sidelines jump in to buy. However, before that, the price may decline and retest the breakout level.
If the level holds, it will indicate that the bulls have turned the downtrend line into support. The ADA/USDT pair could then start an upward movement to $0.29 and subsequently to $0.32.
On the contrary, if the price declines and re-enters the triangle, it will indicate that the markets have rejected the higher levels. The pair could then retest the important support at $0.24.
Dogecoin Price Analysis
Dogecoin (DOGE) surpassed the 20-day EMA ($0.06) on September 29 and reached the 50-day SMA ($0.06) on October 1. This shows that the bulls are trying to start an upward move.
The 20-day EMA is flat, but the RSI jumped into the positive zone, indicating that momentum is turning positive. A close above the 50-day SMA will open the doors to a possible rally to $0.07. This level may act as a minor hurdle, but if crossed, the DOGE/USDT pair is likely to rise to $0.08.
The bears are running out of time. If they want to avoid the rally, they will have to quickly lower the price below the 20-day EMA. The pair could then retest the crucial support at $0.06.
Toncoin Price Analysis
Toncoin’s (TON) relief rally fizzled out at $2.31 on September 28, indicating that bears are selling at higher levels. The price dropped but the bulls held the support at $2.07 on October 1.
The bears renewed their selling on October 2 and drove the price below the vital support of $2.07. If the price remains below this level, the selling could intensify and the TON/USDT pair risks falling to the 50-day SMA ($1.84).
On the upside, the bulls will have to push the price above $2.31 to open the doors to a possible retest of the overhead resistance at $2.59. This level may again attract aggressive selling by the bears.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
