Technical analysis

Is October going to be bullish on the cryptocurrency market?

Julien Moretto – 30 Sep 2020

The cryptocurrency market has been very tricky over the last week. Bitcoin is trading around €9,200 ($10,700) on September 30, up 1.7% over the last seven days. The downtrend that was taking place was suddenly invalidated on September 24 when the price of Bitcoin rebounded around €8850 ($10,200). This reaction has so far broken the bearish momentum that had dominated since the beginning of September, with the $10,000 zone now having been used twice in a few weeks as a support. The same type of movement has been observed on Ethereum at the €275 ($310) level. The correlation between the different cryptoassets remains strong, the recovery is more or less generalized.

Be careful however, we will see that it is too early to rebuy in a medium or long term perspective. Both Bitcoin and Ethereum must first cross intermediate resistance levels that we will analyze in detail below. The situation is also uncertain on the stock markets. It is advisable to keep an eye on the global macroeconomic situation because all asset classes tend to follow the same upward or downward flows since the health crisis. If the stock markets fall again, the probability will be high that this will negatively affect the cryptocurrency market.

  • According to CoinGecko, the market capitalisation continues to oscillate, returning to $347 billion from $335 billion last week.
  • Bitcoin’s dominance is almost stable at 57.1%, compared to 57.7% last week.
  • The best performance of the top 50 is Theta Network (THETA) with +31% over one week.

We invite you to discover our analysis in video (in French and dated from September 29th) :

Bitcoin (BTC)

Coinhouse recommendation: 
Wait

  • Just a little more patience before moving into the next strong directional movement in the market. Bitcoin rebounded well on the €8800 ($10,300) intermediate support we had identified. Its price has even momentarily moved back above €9200 ($10,700). This price action is a first signal for investors willing to take the most risk. It is possible to place a buy order now. But this remains very anticipated. If the market finally turns down, the invalidation level below $10,300 is far from the entry.
  • The most cautious investors will wait for the uptrend that seems to be starting to be confirmed. To validate this, the price must cross the resistant zone of the 9300 to 9430€ (11 000 to 11 200$) level. This will then be a buy signal for the medium to long term. We are therefore adopting a bullish bias this week, but this scenario will be reversed if the €8800 ($10,300) support breaks. We will then have to stay away from the market because the €8600 ($10,000) support will most likely be broken in turn.

Ethereum (ETH)

Coinhouse recommendation: 
Wait

  • Ethereum (ETH) is up 3.1% over the week to stand at €302 ($354) on September 30. Same scenario as for Bitcoin: the €265 ($310) level has now been tested twice as a support, making it a strong zone for buyers. Risk profiles can already buy. But more cautious investors, who are aiming for a medium to long-term horizon, will wait until the latest resistance to date, that of €316 ($390), has been broken sharply upwards before entering the market. We will then be able to target new highs for 2020 on Ethereum.
  • Less likely, a new bearish reversal remains possible. If the 265€ (310$) level breaks, we will have to get out of the market. The probabilities will be strong to rely on the 245€ (290$) polarizing level, which will be favorable to make purchases.

Chainlink (LINK)

Coinhouse recommendation: 
Buy

  • Chainlink (LINK) gives us a nice bounce this week and earns 12%, at €8.33 ($9.77). The reaction in our technical buyback zone between $8.10 and $10 was again successful. This is an area clearly identified as strategic to buy some Chainlink. The price must now return to the $13.50 level and then break up to confirm a long term recovery. Partial profits may eventually be taken in this area which should cause a reaction from sellers. Of course, if the price of Chainlink falls below $8, it will be a sell signal.

Tops & flops of the week (top 50 marketcap)


Tops

1- Theta Network (THETA) : +32%
2- Cosmos (ATOM) : +28%
3- OMG Network (OMG) : +21%


Flops

1- UMA: -18,7%
2- DigiByte (DGB) : -14%
3- yearn.finance (YFI) : -8,3%

In this article, all information is given for information purposes only, even if it has been established from serious and reputable sources. It does not constitute an offer by Coinhouse to buy or sell digital assets, or an offer to provide services on digital assets, nor does it constitute advice, encouragement or a recommendation to operate on the digital assets in question. It constitutes simple information over which the user retains absolute control. We inform you that if you choose to invest in digital assets, you must be aware of our general terms and conditions of sale (https://bit.ly/2FGW2ek) and accept the various risks listed and defined on our legal warning page (https://bit.ly/3c4sQKc).

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