Bitcoin (BTC) rallied above the $19,000 mark on September 20, a day after falling to its lowest level in three months.
Bitcoin is in a bind after falling below $20,000
On the daily chart, the BTC price rose from $18,255 to $19,650. This 7.5% bounce mirrored similar rebound moves witnessed in the stock market, suggesting that investors have been getting used to another major interest rate hike by the Federal Reserve planned for 20-21. of September.
However, opinions differ on the longevity of Bitcoin’s bounce. Independent market analyst Jonny Moe highlighted that BTC’s price action is similar to its sideways consolidation moves from earlier in the year.
In other words, the current Bitcoin price bounces around the $20,000 mark do not constitute a long-term bull case.
— Jonny Moe (@JonnyMoeTrades) September 19, 2022
Rudy Takala, a former Fox News executive and Cointelegraph op-ed, also warns crypto traders to prepare for more “dark times” due to worsening economic conditions globally.
On the other hand, some analysts believe that Bitcoin is facing a strong bullish reversal in the coming times. Let’s take a look at the three bullish market outlooks.
Bitcoin draws a “bullish hammer”
Bitcoin’s Sept. 20 candle is a bullish hammer, suggesting a weakening of bearish momentum, according to the pseudonymous analyst; Trader Tardigrade.
A bullish hammer candle forms when the asset falls significantly below its opening value, but recovers to close near the same level. Traders see the hammer as a bearish rejection signal, given its history of preceding market bottoms.
Trader Tardigrade applies the same theory to Bitcoin’s recovery move on September 20, noting that its bullish hammer may mark the beginning of a trend change.
On daily chart, a “BULLISH HAMMER” candle was printed, which may bring us a reversal.
â ‡ï¸ Long lower wick
â‡ï¸ White candle
â ‡ï¸ Low below previous swing low
— Trader Tardigrade (@TATrader_Alan) September 20, 2022
Pi cycle background
Another technical signal that anticipates a strong Bitcoin rebound is the bottom of the Pi cycle.
Specifically, the open source indicator tracks two long-term simple moving averages (SMAs): the 471-day SMA and the 150-day EMA. History shows that the price of Bitcoin bottoms out in the market cycle when the 150-day EMA crosses below the 471-day SMA.
Meanwhile, the price is heading for a strong bullish reversal in the days before and after the 150-day SMA closes above the 471-day SMA. The pseudonymous analyst, Titan of Crypto, highlighted that Bitcoin is heading for a bullish crossover of the 150-471 day SMA sometime in 2023.
“The first crossing occurred in July,” the analyst noted, adding:
“The second crossover has not happened yet. The change in trend could be closer than we think.”
Aurelien Ohayon, the CEO of investment strategy firm XOR Strategy, anticipates that Bitcoin will hit $45,000 in early 2023, arguing that the price of BTC has been following the popular Wyckoff cycle pattern.
A Wyckoff cycle has four phases: accumulation, increase, distribution, and reduction. After the drawdown phase, the cycle repeats with the accumulation phase, which, as Ohayon points out, is the case with the current Bitcoin price rally.
“Bitcoin is entering the final bullish phase of the Wyckoff cycle,” the analyst concludes.
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