Technical analysis of this week’s crypto trading market
A strong start of a week for crypto traders as the prices of bitcoin remained at around 9,700 levels after the rally over the weekend. As we wrap up October, the strong upside bias remains intact in the market and it’s likely to carry on into early November trading.
Bitcoin recorded an over 40 percent daily gain on Saturday, from lows of below 7,400 to high above 10,300, it was the third-largest daily surge for the leading cryptocurrency in the history. Markets believe that a speech from the Chinese President attributed to the latest rally.
Chinese President Xi Jinping remarked on Friday, saying that China should speed up its adoption and application in blockchain technology. Meanwhile, China has passed a newly drafted cryptography law on Saturday, which aims to deal with new regulatory and legal disputes regarding the commercial application of cryptography applications. That also indicates that China is ready to bring blockchain applications to the next level, despite bitcoin ban is still unlikely to be lifted anytime soon.
Also, the development of China’s stated backed digital currency is something traders should watch it closely as well.
- BTCUSDT traded near the upper 9,600 handle on Monday, which is around its 100-day moving average after the drastically surge over the weekend.
- OKEx Technicals believes that the pair may have to further consolidate near the 9,700 levels before beginning a new round of rally, despite the pair may have appeared to break the July-October downward channel initially.
- 38.2% Fibonacci Retracement of July-October downtrend is near 9,800.
- Before we can call a real trend reversal, we would like to evidence a positive breakout from the weekly chart (figure 2). It clearly shows that the pair is still in a downward channel.
- We expect to see more short position openings in BTC after the price surge, as OKEx’s BTC Long/Short Ratio retreated from 1.81 to 1.61, which indicates some of that long positions have already locked profit, and short positions now have higher potential profit.
- Like BTCUSDT, we saw an initial breakout of the downtrend in EOSUSDT after the weekend rally, but unlike BTC, EOS still below its 100-day moving average (green line) and far below its 250-day moving average (purple line).
- The positive sentiment in BTC has spillover to the altcoin space, and EOS could continue to benefit from it. If the pair can maintain its support at above 3.56, it could retest the 4.8 area.
- OKEx Technicals has been covering Chainlink since September and it has been one of the top performers in the altcoin space as LINKUSDT retested the key levels of 3 over the weekend.
- A daily ascending triangle pattern seems formed, which could be a medium-term bullish signal.
- The pair could retest the support of the lower end of the triangle, which at around 2.6 level, before producing a breakout.
- Also, the Bollinger Bands could have started to squeeze, which could suggest that a breakout could be on the way.
- The pair may have come to a critical point as it reached the key 74.7 area, which is a major resistance since late September, and the weekend rally has sent the pair above that level but failed to maintain so far.
- If the pair can break and stay above that 74.7 levels, it could retest the 250-SMA on the 6-hour chart, which is around 77.5
Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.
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