Bitcoin (BTCUSD) (3-day/8-hour comparison)
Bitcoin began the month of October with a bang, with rampant euphoria on social media renaming it “Uptober”.
Looking at our 3-day/8-hour chart comparison, there is a strong bull case after a month of choppy price action in September led to rapid expansion late last week.
We are back above our orange macro “neutral zone” on the 3D chart, which is a good sign after the lows in the summer bounced from our green “buy zone”.
Looking at two ranges on the 8-hour chart, we did top out perfectly at this $49k “fakeout” level, but consolidating under this resistance doesn’t exactly scream “rejection.” A healthy retrace to the $45k area would look more sustainable, but there is a possibility that unexposed investors will remain sidelined waiting for a dip that doesn’t come.
A high time-frame candle close above $50k would likely lead to new ATHs, while a close below $44k would likely lead to lower retests for support.
Ethereum (ETHUSD) (3-day/8-hour comparison)
Ethereum has mirrored Bitcoin’s price action very closely, but remains a slight laggard, failing to break above some key levels. We saw similar conditions late last year as Bitcoin hit new highs while ETH stayed stagnant.
Ethereum could be poised for upside expansion once we see a high timeframe candle close above $4000, or lower retests if we revisit $3000.
Fundamentals & Correlations (weekly)
Looking at the weely Bitcoin dominance chart(BTC.D), we see it is still dribbling along support in the low 40% area. This gives altcoins some breathing room, but their days could be numbered. Another big move up from BTC is likely to result in a reversal on BTC.D and altcoins will be outpaced until things level off.
The weekly US Dollar Index (DXY) is showing signs of rejection at our long held diagonal resistance after rallying for the past few weeks. As we often mention, if the dollar weakens, Bitcoin & crypto as a whole tend to go up in value.
“Uptober” may be a funny meme, but it seems like there is ample evidence that it could become a reality.