Bitcoin prices could have finished September and Q3 at the 2 months' high of 66,000, but this was prevented by yesterday's trading session. Having assessed the profit made in recent weeks, many bulls decided to exit long positions on the main cryptocurrency. As a result, bitcoin fell in price by almost 4%, though it held above the support level of 62,500. But if this level is breached from the top down, the price could quickly roll back to 60,500.
The bitcoin correction was triggered by yesterday's speech by Fed chief Jerome Powell. The head of the US central bank somewhat cooled the enthusiasm of the most optimistic market participants regarding further monetary policy easing. According to him, the September reduction of the key rate by 0.5% is not typical and does not guarantee the same step at the meeting on November 7. Powell's speech resulted in a strengthening of the dollar and a drop in investor interest in cryptocurrencies and other high-risk assets.
Brian Strugats from FalconX also notes that bitcoin is overbought, according to technical indicators. He believes that major market participants are not ready for prices to move above the 66,150 level, so they will sell the cryptocurrency when it reaches this point. However, even with the Monday decline, bitcoin ended September with a rise by 7.6%. This is the best result for the first month of fall in 12 years, so traders have no reason to quickly buy back the drawdown.
Chris Newhouse, director of research at Cumberland Labs, draws attention to the level of 65,000 on the bitcoin chart. He considers this a key level for profit-taking, especially for holders of futures contracts on the main cryptocurrency. He thinks that it may be reasonable to buy bitcoin again when the price drops closer to the 60,000 level. Until then, the initiative will be held by the bears.
The Stochastic indicator confirms the downward reversal of the price trend. The nearest target of bitcoin sellers may become the level of 62,500, and then the level of 60,500.
The following trading strategy scenario can be offered:
Sell BTCUSD at the current price. Take profit 1 – 62,500. Take profit 2 – 60,500. Stop loss – 66,000.
This content is for informational purposes only and is not intended to be investing advice.
