• Bitcoin price has developed a bullish divergence with RSI, hinting at more upside.
  • Despite the optimistic technicals, investors should expect volatile swings before the end of the third quarter of 2022. 
  • A break under and flip of the $17,593 level into a resistance level will invalidate the bullish thesis for BTC.

Bitcoin price is trading above two crucial levels, suggesting a stable foothold. Combining this outlook with a bullish divergence signal, BTC holders should expect a favorable outcome. However, since the third quarter will end in a few hours, there is bound to be abnormal volatility in the market, which could trigger massive moves in either direction, so investors need to be cautious. 

Bitcoin price and the start of a new quarter

Bitcoin price formed a firm bottom on June 30 at $19,230, which was followed by a 31% ascent that set up a swing high at $25,205. After that, an exhaustion of the move’s momentum combined with investors booking profits, saw markets turn around and resulted in a 27% crash that formed another bottom at $18,210 on September 19.

These lower lows might indicate a bearish outlook, but the Relative Strength Index (RSI) shows that whilst price was falling it was rising, indicating a bullish divergence. This technical formation reveals a lack of selling pressure and can be a signal the market will reverse and start moving higher.

As sellers lose steam, Bitcoin price will reflect what can be already seen in the momentum - a bullish resurgence, triggering a run-up. The resulting move could push BTC up by 20% before encountering the 200-weekly Simple Moving Average (SMA), which is the most significant hurdle.

If the momentum is strong enough to flip this blockade, Bitcoin price could reach the next resistance level at $29,563. This move would constitute a 48% gain from the current position and is likely where the upside is capped for the big crypto.

BTC/USDT 3-day chart

BTC/USDT 3-day chart

Assessing other outlooks using the quarterly BTC chart 

While the three-day chart for Bitcoin price shows signs of bullishness, the quarterly chart less so. Instead, it reveals two important barriers:

  1. A resistance area, from $27,734 to $29,296.
  2. A support block from $13,880 to $19,666.

From a macro outlook, the support block has been extremely helpful in assisting buyers and absorbing the incoming selling pressure. Therefore, the possibility of a bounce from the current position to $29,296 makes logical sense and also aligns with the narrative detailed above.

Furthermore, a flip of the resistance area could allow Bitcoin price to extend its gain from 48% to 68% as it retests the Fair Value Gap (FVG), aka imbalance, at $32,950.

BTC/USD 3-month chart

BTC/USD 3-month chart

Although the fact today is the last day of 2022’s third quarter adds plausibility to the bullish outlook, there is likely to be massive volatility, which could push Bitcoin price in either direction, and it may be advisable to avoid trading until the quarterly close. 

Investors should also consider the possibility of a market manipulation that pushes Bitcoin price to sweep June’s low at $17,593.

On the other hand, if sellers take control and push Bitcoin price to produce a three-day candlestick close below the September 19 swing low at $18,210, it would invalidate the bullish divergence and thesis outlined above.

In such a case, market participants should consider the possibility of digging deeper into the $13,880 to $19,666 support box. This move could knock Bitcoin price to retest  intermediate support at $15,550

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: Assessing chances of one last bear market rally for 2022

Bitcoin Weekly Forecast: Assessing chances of one last bear market rally for 2022

Bitcoin price is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

More Bitcoin News

Uniswap price could kick-start a 14% rally if it reclaims this level

Uniswap price could kick-start a 14% rally if it reclaims this level

Uniswap price has been following the broader market bullish cues over the last few days sustaining its rise from 48 hours ago. Although the sentiment seems to have shifted slightly, UNI holders can still book profits if the Decentralized Finance (DeFi) token climbs to this level.

More UniSwap news

ATOM price suggests bears are still in control for these reasons

ATOM price suggests bears are still in control for these reasons

Cosmos price is producing a countertrend rally after suffering a steep decline throughout the month. If market conditions persist, ATOM could wipe out newly established bullish positions. Key levels have been defined to gauge ATOM’s next potential move.

More Cosmos news

Cardano Price Prediction: A new yearly low before the bounce

Cardano Price Prediction: A new yearly low before the bounce

Cardano price has suffered a vicious downtrend move throughout November. Ss price consolidates, the technicals suggest a bounce occurs while on-chain metrics hint that investors are considering securing profits sooner than later.

More Cardano news

Bitcoin: Assessing chances of one last bear market rally for 2022

Bitcoin: Assessing chances of one last bear market rally for 2022

BTC is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

Read full analysis

BTC

ETH

XRP