BTC blows past the downtrend line from late September highs, with $62,000 as key support.
The dollar rally may be peaking.
Ether’s triangular consolidation continues.
Bitcoin’s (BTC) positive price action during Monday’s Asia session suggests a strong possibility that the steep upward move that began at around $54,000 in early September is about to resume.
BTC has risen over 2% to $64,300 in Asia, blasting past a trendline resistance off late Sept. 27 and Oct. 7 highs. The trendline represented a pullback characterized by a stimulus-led sharp upswing in oversold Chinese stocks and the strength in the dollar index.
The trendline breakout, therefore, indicates the mini price swoon has ended and the upswing from September lows under $54,000 has resumed.
The immediate resistance is seen at $64,461, from where prices turned lower on Oct. 7, followed by the late September high above $66,500. A major piece of resistance would be around $70,000, where the battle between bulls and bears has been most intense since March, with bulls constantly failing to secure a foothold.
Note that re-test of breakout points is a common phenomenon, meaning prices could revisit the $62,000-$63,000 range before continuing to move higher. That said, a move below $62,000 would negate the bullish view, potentially bringing deeper losses below $60,000.
The dollar index’s rise has stalled near 103.00, supports the case for a move higher in risk assets, including BTC. The DXY formed a doji candle on Thursday, signaling indecision among traders. The dollar has held well within Thursday’s trading range, teasing a potential end to the rally from late September lows near 100.
A doji candle forms when an asset moves in both directions only to end the period on a flat note, indicating a lack of willingness among bulls and bears to lead the price action. The indecision after a notable upswing can represent potential trend reversal.
“The momentum indicators have been stretched by the greenback’s strong recovery this month. We are anticipating technical evidence to suggest the dollar is peaking,” Marc Chandler, chief market strategist at Bannockburn Global Forex and author of “Making Sense of the Dollar, said in a market update.
Ether stuck in a triangle
Ether (ETH) bounced off the 200-day simple moving average (SMA) early today but continues to trade within the confines of a triangular consolidation pattern, identified by trendlines connecting Aug. 24 and Sept. 27 highs and Aug. 5 and Sept. 6 lows.
With BTC teasing a bull move, ether could look to break out of the triangle, exposing the next resistance at $2,770, the April 13 low from where prices surged back to nearly $4,000.