Bitcoin pulls back from 6-week high

Yesterday (Monday, Oct 2nd), the world’s largest crypto surged to its highest prices since August 17th.

However, Bitcoin was unable to hold on to the psychological $28k handle, resisted around its 200-day simple moving average (SMA), before paring recent gains.

Bitcoin got a perhaps short-lived boost as exchange-traded-funds (ETFs) based on futures contracts for Ether began trading in the US yesterday.

The crypto fraud trial of FTX founder Sam Bankman-Fried, which starts this week, may add to the market noise over the duration of the trial.

To be clear, Bitcoin is still holding well above its September range.

Traders would also notice that prices have broken past the downward upper trendline that commenced on July 13th – Bitcoin’s year-to-date intraday high of $31,789.20.

Q4 seasonality off to a good start for Bitcoin bulls

The price action at the onset of the week lends credence to what we had conveyed in our August 22nd article titled, “Bitcoin may only wake up when September ends”.

That article not only looked forward to the launch of those Ether futures ETFs, but it also highlighted that, historically, Q4 has been a conducive period for Bitcoin gains.

As a reminder, here’s how Bitcoin has typically fared over the final three months of the calendar year:

• October = up 31.4%*
   
• November = up 37.6%*
   
• December = up 13.3%*

* = monthly average since 2010

Broader markets sentiment still in risk-off mode

However, note that sentiment among traders and investors worldwide still points to risk aversion. Stocks are falling, while the safe haven US dollar has been skyrocketing!

This alludes to a tough environment for risk assets in general, including Bitcoin, to secure greater gains.

Still, seasoned market watchers would know that Bitcoin, and other cryptos, often march to the beat of their own drum, drawing little inspiration from what’s happening across global financial markets at large.

Hence, Bitcoin may yet draw in enough fans who could push prices even higher to prove true the notion that Q4 is indeed a merry time for crypto bulls.

Looking at the price charts …

Bitcoin bulls may aim for the $29k region as their next level of conquest, restoring this crypto to the price range last seen in the first half of August.

A stronger footing within that $28,600 to $30,000 range may form a solid base from which to perhaps restore Bitcoin back to its year-to-date high.

To the downside, if Bitcoin’s recent surge truly proves fleeting, support may arrive at:

• $27,000 region: psychologically-important level, and downward upper trendline from Bitcoin’s July-September downtrend
   
• 50-day SMA
   
• $26,000 region: psychologically-important level; key battleground between bulls and bears between mid-August till mid-September.

Even in a sudden capitulation among Bitcoin bulls, crypto aficionados will be hoping that the crucial support level at $25,000 region will come to the fore once more, as it did back in mid-June and mid-September.