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Cardano price paints ‘death cross’ with ADA at two-month lows vs. Bitcoin

ADA price has been struggling against the U.S. dollar in October.

Cardano (ADA) has formed a deadly "death cross" on its daily chart against Bitcoin (BTC) — a market signal that's generally seen as a warning of more downside in the near term.

The ominously-titled indicator kicks in when an asset's short-term moving average closes below its long-term moving average. In doing so, it calls for technically-minded traders to increase their bearish positions in the market.

 ADA/BTC in trouble

On Tuesday, ADA's 50-day exponential moving average (50-day EMA; the velvet wave) dropped below its 100-day exponential moving average (100-day EMA; the blue wave). That marked the sixth 50–100 EMA bearish crossover ever on the ADA/BTC daily chart, raising fears of further declines ahead.

ADA/BTC daily price chart featuring Oct 2021 death cross. Source: TradingView

That is partly due to ADA's earlier price reactions to death crosses. For instance, in September 2020, the Cardano token's price dropped almost 38.50% against Bitcoin after painting a 50–100 EMA bearish crossover.

Similarly, a death cross pattern on May 12, 2019, subsequently saw a 62.50% price decline.

ADA/BTC daily price chart featuring May 2019 death cross. Source: TradingView

Nonetheless, the likelihood of an immediate selloff remains relatively low. That is mainly because ADA's daily relative strength index (RSI), which alerted the token's status against Bitcoin as oversold, is below 30. Traders typically treat an excessively sold RSI as their cue to enter the market.

For instance, in May 2019, the death cross's formation coincided with the RSI treading below 30. Later, the price bounced by over 30% to retest the 50-day and 100-day EMA waves as resistance, underscoring traders' intention to buy oversold cryptos.

Applying the same fractal to the current price action, one can expect the ADA/BTC rates to bounce back, especially as it drops to its two-month-low at 0.00003372 BTC runs down to retest a five-month-old support area defined by 0.00003192–0.00003075 BTC (the red bar in the first chart above).

That inverse Cup and Handle

A weakening ADA/BTC rate merely reflects Cardano's clumsy performance against the U.S. dollar in recent sessions versus Bitcoin, which has surged massively against the greenback in the same timeframe.

For instance, Bitcoin's month-to-date gains against the dollar sit around 43%. In comparison, Cardano's price has slid by over 6% during the same period. 

But further weakness could be expected, according to an inverse Cup and Handle pattern taking shape on its dollar-quoted charts. 

ADA/USDT daily price chart featuring inverse cup and handle pattern. Source: TradingView

In detail, inverse Cup and Handle patterns appear when the price forms a large crescent shape followed by a modest upward retracement.

Analysts consider them as bearish reversal indicators, for they tend to send the price down by as much as the maximum distance between the Cup's top and its right-hand's bottom level if the price breaks below the pattern's support.

Related: Buy the rumor... buy the news? BTC price passes $63K as US Bitcoin ETF launches

ADA's recent price action fits the inverse Cup and Handle description, with the price now looking to break below the structure's resistance line near $1.97. As a result, the downside target price is the $0.772–$0.820 area if Cardano confirms a bearish breakout.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin history repeating? 3 indicators suggest October will reignite the BTC bull market

The flagship cryptocurrency has closed October in profits seven out of nine times since 2013, raising hopes that it would be able to log a fractal bull run in the next 31 days.

Bitcoin (BTC) failed to break the so-called September curse as its price fell by a little over 7% into the month despite a strong rebound rally right ahead of its close. Nonetheless, Bitcoin looks to be making a comeback in October, a month known for painting aggressive bullish reversals.

Bybt data shows that Bitcoin has closed October in profits the majority of the time since 2013 — with a success rate of over 77%. Last year, the cryptocurrency surged by 28% to reach levels above $13,500 after finishing September at around $10,800, following an approximate 7.5% decline.

Bitcoin monthly returns since 2013. Source: Bybt

Similarly, Bitcoin had climbed higher by over 10% by the end of October 2019 despite plunging by around 14% in the previous month. That made September look like a sell-off month for traders, with its record of logging losses seven out of nine times since 2013.

In contrast, October posed itself as a period of dip-buying, suggesting that traders may end up pumping Bitcoin’s price higher by Oct. 31.

The October fractal surfaces despite alarming signals in the form of China’s intensifying crackdown and the United State’s tougher regulatory stance on the crypto sector.

Additionally, the prospects of the Federal Reserve limiting its $120-billion-a-month bond-purchasing program later this year appear to have been limiting Bitcoin’s upside outlook. The loose monetary policy, combined with the U.S. central bank’s near-zero interest rates, was instrumental in pumping Bitcoin’s price rally from below $4,000 in March 2020 to almost $65,000 by April 2021.

But despite the short-term setbacks, a flurry of key indicators revealed that investors still want exposure in the booming cryptocurrency space.

Institutional inflows

Crypto data tracking service CryptoCompare noted in its report that volumes associated with digital asset investment products rose 9.6% in September. Meanwhile, the weekly product inflows rose to $69.7 million, the highest since May 2021.

“Bitcoin-based products saw the highest level of inflows out of any asset, averaging $31.2 million per week,” CryptoCompare wrote, adding that “there could be upside going into the last quarter of 2021.”

Average weekly net inflow by asset for the month of September. Source: CryptoCompare

The 20-week EMA fractal

Technical indicators also pointed to a bullish session ahead for Bitcoin as it formed a base around $40,000 before the September close and reclaimed key resistance levels as interim support. That included the bias-defining 21-week exponential moving average (21-week EMA).

As Cointelegraph covered earlier, a drop below the 21-week EMA increased Bitcoin’s probability to continue falling by 78%. On Sept. 27, the cryptocurrency fell below the green wave (as shown in the chart below) but reclaimed it as support while entering the October session.

BTC/USD weekly price chart featuring 20-week EMA-focused bull runs. Source: TradingView

A move above the 20-week EMA, accompanied by rising volumes, has historically led to explosive Bitcoin bull runs. As a result, if the fractal repeats, the BTC price may head toward a new record high in the sessions ahead.

Bull pennant breakout

Another technical indicator that has been predicting a bullish outcome for Bitcoin is bull pennant.

Related: Analyst nails Bitcoin monthly close 2 months running — His October target is $63K

In detail, BTC’s price has been consolidating inside two converging trendlines following its 500%-plus rally.

Traditional analysts view these lateral moves as a sign of bullish continuation. In doing so, they anticipate that the price will break above the pattern’s upper trendline — and rise by as much as the length of the previous uptrend, called the flagpole.

Bitcoin weekly price chart featuring bull pennant structure. Source: TradingView

As a result, Bitcoin’s path of least resistance appears to be to the upside, with a potential breakout move looking to send its prices toward $100,000 (flagpole’s height is roughly $50,000).

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin price eyes $50K as the US Dollar retreats after hitting its one-year high

Rising jobless claims in the U.S. sparked selloffs in the dollar market. On the other hand, Bitcoin held onto its intraday gains.

Bitcoin (BTC) looks to reclaim $45,000 on Oct. 1 as the U.S dollar retreated lower after hitting its one-year high. Bitcoin's tight inverse correlation with the greenback over the past month suggests that a weakening dollar could push BTC price even higher in the coming sessions. 

Bitcoin-dollar correlation on hourly chart. Source: TradingView.com

Dollar drops following labor market shock

In detail, the U.S. Dollar Index (DXY), which measures the greenback's strength against a basket of six foreign currencies, including euro and sterling, hit $94.50 Thursday for the first time since Sept. 28, 2020. But it retreated on news of rising U.S. jobless claims against the forecasts of a decline.

The labor data released Thursday showed that the number of jobless claims rose to 362,000 last week against 351,000 a week earlier and against the economists' projection of 333,000. As a result, the number of reapplications got stuck around 2.8 million for five weeks in a row.

For the markets, this could be the news that the Federal Reserve might delay tapering its $120 billion asset purchasing program from November to a later month, thus keeping interest rates lower and the dollar's renewed strength temporary.

DXY daily price chart. Source: TradingView.com

The index was trading at 94.263 at the time of this writing.

Technical outlook projects Bitcoin higher, dollar lower

Technicals also showed the greenback facing the prospect of a correction ahead. For example, independent market analyst TradingShot spotted the dollar index inside a Megaphone pattern, about to get topped out to pursue a correction in the coming sessions, as shown in the chart below.

US dollar index daily price chart featuring Megaphone technical setup. Source: TradingShot, TradingView.com

"Based on the 1D relative strength index (RSI), it appears that DXY is right at the top of the formation as [it was] on Aug 15, 2018," TradingShot wrote.

"DXY is building up a strong pull-back to the bottom of the Megaphone."

Meanwhile, a recent bout of selling in the Bitcoin market lately had it paint a Falling Wedge pattern. In detail, Falling Wedges appear when the price trends lower inside a channel comprising of two diverging, descending trendlines.

Traditional analysts see the Falling Wedge pattern as a bullish reversal indicator, noting that a break above its upper trendline moves the price higher by as much as the maximum distance between the Wedge's trendlines.

BTC/USD daily price chart featuring falling wedge setup. Source: TradingView.com

The structure's maximum height is roughly $10,000. As a result, the Bitcoin price can at least retest $50,000 should the Wedge breakout play out as intended.

A weaker dollar means stronger Bitcoin

On the other hand, the underwhelming jobs report could boost investors' interim appetite for Bitcoin. 

Related: Bitcoin’s sharp fall from $50K linked to stronger US dollar, gold — Correlation shows

Vasja Zupan, president of Matrix Exchange, told Cointelegraph that the dollar's weakness and devaluation against rising inflation would continue to make investors put their excess cash in crypto markets. He said:

"Bitcoin in its core proposition has an integrated hedge against inflation and therefore persistently higher inflation in the U.S. can only push it upwards. Therefore, in the long term, the dollar's worth will continue to be lesser than Bitcoin.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Is the time right for $50K BTC? 5 things to watch in Bitcoin this week

It's been a long time coming, but as yet, nothing has been able to propel BTC/USD over $50,000 for long. Is this week different?

Bitcoin (BTC) is keeping everyone guessing this week as another Monday starts below $50,000.

After rangebound movements over the weekend, bulls are still waiting for a decisive attack on the $50,000 mark — could it happen now?

Despite optimism from analysts, it seems that not even an “uber dovish” Federal Reserve has the fuel to push BTC/USD above crucial resistance.

Cointelegraph takes a look at five things which could still provide Bitcoin with new momentum.

Dollar comedown as stocks set for even higher highs

Stocks hit fresh all-time highs last week on the back of comments from Fed Chair Jerome Powell.

Correspondingly, the strength of the U.S. dollar took a hit, and the U.S. dollar currency index (DXY) began a multi-day downtrend.

Such conditions tend to be favorable for Bitcoin, and a lack of headwinds coming from the macro-environment could yet give bulls a helping hand.

“There is little doubt Powell was dovish, relative to market pricing and positioning,” one analyst told Bloomberg, echoing the general feeling from Friday’s speech.

DXY 1-day candle chart. Source: TradingView

Resistance keeps Bitcoin bulls in check

Saturday and Sunday weren’t exactly boring for Bitcoin traders — two run-ups above $49,000 gave them plenty of hope for the “big showdown” against the $50,000 barrier.

In the end, however, both attempts failed below $49,500, and BTC/USD remained in a narrow range in the upper $40,000 zone.

On Monday, the picture remains the same, with $47,000 now back on the table for support.

“Bullish on Bitcoin above $51K, until then just noise,” Cointelegraph Contributor Michaël van de Poppe summarized as the weekend ended.

In an uncertain environment, others are warning that buy-side strength may yet crumble in the short term to produce lower support retests.

“BTC is still trying to hold this red area as support, producing increasingly volatile downside wicks below it,” trader and analyst Rekt Capital commented on an updated daily chart.

“The downside has been bought up successfully thus far but this blue downtrending resistance continues to weigh down on price.”

A look at buy and sell levels on major exchange Binance Monday underscores the relative lack of support much above $40,000, while firm resistance is in place overhead.

BTC/USD buy and sell levels (Binance) as of Aug. 30. Source: Material Indicators/ Twitter

Hash rate retests April dip zone

It’s a situation that could yet play out elsewhere in Bitcoin beyond spot price — fundamentals are also slowing their rapid growth.

After an impressive 13.2% upward difficulty adjustment a week ago, Bitcoin is now looking at the next being all but flat — less than 1% is currently estimated to be added.

This may yet turn negative, marking a pause for thought among miners after a mass return to the network over recent weeks.

Should difficulty nonetheless increase, however, it would seal the second run of four upward difficulty adjustments in a row for 2021.

Correspondingly, network hash rate is also lingering at higher levels this week, approaching the 125 exahashes per second (EH/s) mark.

Hash rate has recovered extremely well since July, and is now just 40 EH/s away from all-time highs, having added 4 EH/s since last Monday.

Investor and analyst Vince Prince further noted that current levels echo the brief lows seen after April’s all-time highs for BTC/USD. Hash rate then bounced to hit all-time highs of its own before the China rout took hold.

“Bitcoin's hash rate is already back to the levels seen in November 2020,” an even more optimistic Anthony Pompliano added last week.

“It wouldn't surprise me to see a new hash rate all-time high by end of year.”
Bitcoin 7-day average hash rate chart. Source: Blockchain

Sizing up the chances of $50,000

What are the odds that a $50,000 onslaught by bulls becomes the defining market feature this week?

As Cointelegraph reported, the upcoming U.S. jobs data release on Friday may already seal the deadline for a BTC comeback.

The ingredients to make it happen are already broadly in place — neutral funding rates across trading platforms and an increasing supply of stablecoins, this topping $19 billion.

“Since the surge of US$1.8 billion in a single day on August 24, the accumulated stablecoins on centralized exchanges have exceeded 19 billion for a week,” on-chain analytics firm CryptoQuant noted Monday citing data from CoinGecko.

It added that trading volumes for major stablecoins have also increased, in the case of market leader Tether (USDT) by 28% in the past five days.

Charles Edwards, founder at Capriole Investments, meanwhile noted that Bitcoin’s decreasing dominance, now at 44%, is in itself a bull trigger-in-waiting.

“This sidelined capital is like rocket fuel for when we start getting daily closes above $50K,” he argued.

What could be the sticking point? For analyst William Clemente, low volumes remain an issue in the short term.

“If anything has me concerned it's this,” he summarized alongside a comparative chart of volume throughout the 2020-21 bull run.

“Where is the demand?”
Bitcoin volume chart. Source: William Clemente/ Twitter

Eerie calm continues for sentiment

The idea that Bitcoin is facing its “final hurdle” before challenging all-time highs is arguably already visible in trader sentiment.

Related: Top 5 cryptocurrencies to watch this week: BTC, ADA, LUNA, VET, XTZ

After BTC/USD added 60% in weeks, sentiment likewise went from “extreme fear” to “extreme greed” — as per the Crypto Fear & Greed Index.

Now, as the pace of gains has slowed due to $50,000 resistance, so too has “extreme” feeling given way to a more moderate “greed” rating on the Index.

August has in fact been mostly stable for sentiment, which the Index has measured at between 70 and 80 for the past three weeks.

The ideal bull run combines solid price appreciation with steady sentiment increases — as history has shown, hitting the standard top zone of 95/100 on Fear & Greed too quickly coincides with a BTC price sell-off.

Crypto Fear & Greed Index. Source: Alternative.me

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