Bitcoin could hit a long-term low after October ends.
The pullback to 60,000 is not a surprise, for Ng.
Beyond the bullish expectations that abound about bitcoin (BTC) for October, there are factors that still show headwinds.
“Investor eyes are eagerly set on October or, as it is known among cryptocurrency circles, uptober”, indicates financial analyst Dr. Bruce Ng. This is because, historically, this month has been bullish for the overall market. However, he clarifies that a suitable scenario for this still needs to be developed.
Since the price of bitcoin hit a new all-time high seven months ago, it has been on a long, slow downward slide, posting lower highs and lower lows. Although, after falling to around $50,000 (USD) two months ago, in August, it has shown a slight upward reversal. In fact, September, a historically bearish month, ended with a rise of 7.3%.
Despite this, October has started with a price decline to USD 60,000, which signals weakness in the market, something that does not surprise Bruce Ng. “There are two key reasons why bitcoin is not ready to rise yet,” he says.
The first reason is that there is strong resistance between USD 67,000 and USD 68,000that is, greater supply than demand in that price range. This is reflected in the drop from that area reached last week for the first time in two months, as the following graph shows. “It will need strong momentum and a hot catalyst to move forward,” the analyst warns.
It also stands out that the United States non-farm payrolls report will be published on Friday, October 4, which may bring high volatility. If it shows that the labor sector continues to weaken, it could stoke fears of recession and temporarily reduce demand in the markets.
The second is that, in his opinion, a long-term cycle minimum should occur after it ends uptober. He warns that, according to cryptocurrency cycle specialist, Juan Villaverde, this could occur sometime around November 5, a product of sales after the historically bullish month.
A long-term cycle low in technical analysis refers to a point on a price chart at which an asset hits its lowest level within an extended downtrend before beginning to rise again.
“This leads me to believe that October may not bring the next big bull rally,” says Bruce Ng. Instead, consider that This month could bring the end of the long, choppy consolidation in which bitcoin has been trapped since March.
Formation of strong support is crucial for bitcoin to gain momentum
If the price of bitcoin establishes strong support around USD 60,000, “it will clear the way for when the markets really take off,” the analyst believes. “This outlook may seem overly optimistic, but there are several macroeconomic factors that should support it,” he notes.
With interest rate cuts in the United States and China beginning a period of reductions, global liquidity has increased and is expected to continue. According to the financial analyst, as well as others reported by CriptoNoticias, it will have a significant expansion, which It is very bullish for risk assets.
Added to this is that the end of American electoral uncertainty is near, with the elections scheduled for November 5. “The last time the US elections were held in a BTC halving year (2020), cryptocurrencies recovered explosively,” remembers Bruce Ng. “We hope something similar happens this time,” he exclaims.
Furthermore, it highlights that Q4 of a BTC halving year tends to be incredibly bullish. This is because this event, which reduces the issuance of the currency by half every four years, attracts demand that values its scarcity.
With this scenario in progress, beyond the price decline that the currency may perceive in the short term, the environment makes possible, according to the analyst, a bullish rebound in the medium term.
