• 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.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP