One big moment late last week was the announcement by the government of the United States not to shut down government functions. Many believe this brought about a spike in the BTC price. I am not in complete agreement with this opinion. One reason is the sudden spike in price on Sunday, the 1st of October. Nothing was happening over the weekend to warrant such a price spike. Perhaps there was the fear of a short squeeze. Nevertheless, vagaries in the crypto market come as no surprise. Without the obvious answer, let us look at a few possible factors.
A look at the Fear & Greed Index tells us that there is investor uncertainty. We are currently at a rate of 44, which signifies a neutral sentiment. The volume profile reveals that the point of control (PoC) acts as a point of resistance but turns to support. Laguerre RSI shows that it is in the overbought territory. The choppiness index also indicates it is getting low on energy at just under 43. While there is promise of a price rise, there are points of concern. For instance, the current price is below the Fibonacci 61.8% level. We may see the price falling further.
The US Dollar Index (DXY) is also showing strength. When the DXY shows strength, the price of BTC tends to fall. These two instruments show an inverse correlation.
Finally, onchain analytics has a few things to say. Let us look at just two indicators. The 200-week moving average heatmap reveals something significant. In each of its market cycles, Bitcoin's price historically bottoms out around the 200-week moving average. Historically, when we see orange and red dots assigned to the price chart, this has been a time to sell Bitcoin as the market overheats. When the price dots are purple and close to the 200-week MA, these have historically been good times to buy. We see this with the current price of BTC.
Another good indication of BTC buying is the 2-year MA Multiplier. We also see that buying BTC should occur when the price is below the green line and selling when above the red. There can be no question; some are accumulating, while some have made a quick profit.
I suspect that the price action will surprise us. We should be ready before the price takes off. It is all we can do or must do. And when will this happen? All I can say is your guess is as good as mine.
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