Bitcoin Daily Price Forecast (9/30/20) - Tightening Wedge; Which Direction Will it Break?

By Crypto Daily FX | Crypto Daily FX | 30 Sep 2020

Bitcoin pulled back on Tuesday, initially falling to the 50 Day EMA where it found support, eventually closing in the red near the $10,850 level. This is not terribly bearish, as Bitcoin is showing us that it is still rangebound in this $1,000 range between $10,000 and $11,000 for now.

(September 29, 2020 8:00 PM EST)


Support: $10,000 continues to be strong support, which is a significant psychological inflection point. The key here is whether or not Bitcoin will hold onto the 50 Day EMA as support, or continue to sell off after a day or so. Look for action there, and further support below at the 200 Day EMA.

Resistance: Another week another fight for the 50 Day EMA. I'm not convinced this Bitcoin run-up is sustainable just yet until Bitcoin shows repeated successful retests of the 50 Day EMA as support. If BTC breaks impulsively above that, look for a move to test $11,000 again. Bitcoin has been bouncing around in this $1,000 range between $10,000 and $11,000 for a couple months now, and there's a tightening wedge forming on the Daily chart, which usually leads to a breakout or breakdown.

Outlook: Not much has changed since yesterday, although it was interesting that equities and gold rallied a bit, while the US Dollar and Bitcoin both fell. This is usually not the case, as we have explained before that gold and BTC are actually somewhat correlated and inversely correlated to the DXY. This is a strange divergence, although it is the end of the month and there is a lot of portfolio rebalancing going on, and with less QE money printing for the past couple weeks, there may be some subtle maneuvers going on right now. Tonight is the first US Presidential Debate, which; in addition to the most recent COVID flareups and other political fears; has a lot of people living in fear and uncertainty - which means holding cash. What does this mean for BTC? Well, it's in a tightening wedge pattern, with lower highs and higher lows. This consolidation pattern usually signals that the consolidation pattern is nearing its conclusion, and that an impulsive move up or down is to come soon once the wedge tightens and breaks. If you look at the chart above, we are not far from that point; in fact, this well aligns with the turbulent market seasonality that is late Sept-early Nov. For now, it might be best to stick to small scalping positions with BTC, and wait for the market to tell us which way it's heading before taking a larger position. I'm still a buyer on dips at larger levels; I suspect there's a chance we get a bigger drop sometime in the next 6 weeks, which might be "the" last great dip to buy before BTC takes off in Q4 into 2021.

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Crypto Daily FX
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