Will bulls take charge now that Bitcoin price trades above a long term trendline resistance?
On Oct.4 and 5, Bitcoin (BTC) took another step through the $20,000 mark, bringing the price above a long-term descending trendline that stretches all the way back to April 22 or Nov. 15, depending on one’s style of technical analysis.
Some traders might be feeling a bit celebratory now that price trades outside of the descending trendline, but have any relevant metrics or macro factors changed enough to support a bullish point-of-view for Bitcoin price?
In reality, BTC price simply “consolidated” its way through the trendline by trading in a sideways manner where price has been range bound between $18,500 and $24,500 for the past 114 days.
Direction-wise, Bitcoin and Ether (ETH) tend to trade in tandem with equities and BTC’s Oct. 4 rally to $20,365 comes as the Dow, S&P 500 and Nasdaq closed the day with 2% to 3% gains.
As a reminder that short-term price action is not necessarily reflective of a larger trend change, Coin Metrics said:
Despite the Oct. 4 “all-in rally” in stocks and crypto markets, the larger fears of global runaway inflation, rising interest rates and other economic concerns continue to suppress investors' appetite for interacting with markets, a fact that is clearly reflected in Q3 results.
On Oct. 5 OPEC announced plans to cut oil production by 2 million barrels per day, which is roughly equivalent to 2% of global oil demand. Oil stocks rallied at the announcement, but the White House is likely concerned that the reductions will complicate the Federal Reserve’s fight against inflation and possibly contribute to higher petrol prices.
Generally, institutional investors like CITI and Goldman Sachs expect volatility in equities markets to continue, and both have revised down their end-of-year targets for
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