Bitcoin Rebounds to $58,000: Dead Cat Bounce or True Rally?Bitcoin (BTC) has recently experienced a period of weakness, falling below $53,000. However, today (October 10th) it surged back above $58,000, reaching $56,822 at the time of writing, representing a 3
Bitcoin Rebounds to $58,000: Dead Cat Bounce or True Rally?
Bitcoin (BTC) has recently experienced a period of weakness, falling below $53,000. However, today (October 10th) it surged back above $58,000, reaching $56,822 at the time of writing, representing a 3.52% daily gain. This rebound has sparked discussion within the market, with investors debating whether it signifies a true bottom and a rally, or simply a temporary bounce.
$55,000 Support is Key, Bullish Divergence and Institutional Options Purchases Offer Positive Signs
Bitcoin closed the weekly candle above $53,250, holding the bottom of the "bargain hunting" zone. For the uptrend to continue, Bitcoin needs to reclaim $55,881 as support to attempt re-entering the bottom of the black channel in the chart. Based on current price action, Bitcoin seems to be holding above this support level for now, indicating a positive sign.
Looking at the 4-hour chart, Bitcoin's Relative Strength Index (RSI) exhibited a bullish divergence in the three days leading up to the price recovery. RSI is a momentum oscillator that tracks trend strength to assess market overbought, oversold, or accumulation zones. Bullish divergence occurs when price falls but momentum strengthens, often leading to price increases. This divergence could suggest that buyers are gaining control and aiming to push prices towards $59,000, near the 200-day Exponential Moving Average (EMA).
Furthermore, substantial options purchases by institutional investors provide support for the Bitcoin rebound. Some institutions seem to believe the market has bottomed, capitalizing on this opportunity to increase their bullish bets for December and March. This includes significant purchases of Bitcoin call options expiring in March 2025 with strike prices of $85,000, $100,000, and $120,000.
Rebound, Yet Potential Catalysts Remain Scarce, Macroeconomic Variables to Watch
August and September were proven to be unusually weak months for Bitcoin price performance, while October and the fourth quarter often favor price trends. In the weeks leading up to the fourth quarter, Bitcoin bulls might only expect potential catalysts from outside the cryptocurrency realm. This includes macroeconomic news like employment, inflation data, and Federal Reserve policies, as well as the US presidential election. Currently, Trump has demonstrated a friendly stance towards cryptocurrencies, while Kamala Harris has not mentioned it yet.
Tomorrow, Trump and Harris will engage in a candidate debate, and the US will release its August CPI data on Wednesday (September 11th) evening, anticipated to increase market volatility.
On-chain Data Shows Stablecoin Reserves in Exchanges Are Rebounding, Binance BTC Shows Outflow Trend
On-chain data suggests that stablecoin reserves in exchanges are rebounding, while Binance BTC exhibits an outflow trend, implying a gradual return of market sentiment.
Conclusion: Short-term Trading Uncertain, Seek Long-Term Profitable Strategies
The current market situation is complex, making short-term trading difficult to predict. Factors like the Fed's interest rate cut expectations, Mt. Gox dump digestion, and macroeconomic uncertainty intertwine, influencing market trends. It is recommended that investors closely monitor macroeconomic data and policy changes, search for long-term profitable strategies, and patiently hold their assets while awaiting market recovery.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Investing involves risk, and due diligence is crucial.
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