Bitcoin Bears Looking for A break Below 8,310
Bitcoin price (BTCUSD) is on track to decline for the first month since July this year. It is also experiencing its worst month since March this year, when it declined to below $4,000. In total, the currency has declined by more than 7% in September. Still, it has performed better than Ripple and Ethereum that have dropped by more than 12%.
Bitcoin and other digital currencies have had a difficult month mostly because of the overall weakness in the financial market and the stronger dollar. The dollar has gained by more than 2% in the September while the Dow Jones and S&P 500 have dropped by more than 4%.
There are several reasons why these assets have dropped. First, a second wave of the virus started to emerge in several countries like Spain and the UK. As a result, investors continued to worry about new travel restrictions and lockdowns.
Second, in the United States, divisions between congress and the White House hindered another round of stimulus package. Democrats have suggested spending more than $2 trillion while Republicans want to spend less than that.
Third, Bitcoin price and other assets also dropped because of the rising tensions ahead of the American election. With violence happening in several states, there are concerns about whether the country will have a peaceful election.
Finally, there are concerns about trade relations between the United States and China. In September, the US implemented more nationalistic policies, like banning TikTok, WeChat, and the biggest chip manufacturer from China. At the same time, China revealed that it had created its own entity list that will possibly come out after the election.
The weekly chart shows that Bitcoin price has declined slightly for the past two consecutive weeks. It is also being supported by the 25-day exponential moving averages. Also, the volume has been relatively lower in the past two weeks. The price is also above the ascending trendline that is shown in blue.
Therefore, I suspect that the BTCUSD will remain in a bullish trend so long as it manages to stay above the 25-day EMA and the ascending trendline. If it does, bulls will attempt to push it above the August high of $12,483.
On the flip side, a move below the 25-day EMA and the September low of $9821 will invalidate this trend. It will mean that there are still bears in the market who will be keen to push it to below $9000.
