$112,000 resistance wall prevents recovery to $122,000

Bitcoin price weekly outlook

The bears were back in full force last week as Bitcoin swung from last week’s lows of around $105,000 to $103,000. We have seen another nice bounce from the support zone, but so far the bounce has been weaker than the one experienced the previous week. The bulls have regained momentum and are likely to remain subdued for the time being. Last week’s close of $108,717 was well below the 21 EMA support level that we wanted to maintain, providing further confidence in our overall bearish bias.

Current major support and resistance levels

Overhead resistance looks very strong on the chart right now. There is currently a wall of resistance above the price, with resistance levels at $112,200, $115,500, and $117,600 just above the 0.618 Fibonacci retracement. Even if the price manages to rise above all these levels, it still needs to close convincingly above $122,000 to shift the bullish bias back and look for higher prices.

At the lower end, we have gained all the strength we could expect from the $105,000 to $102,000 support zone, so if price revisits the lows there, we should expect that zone to fail. Below that there is strong support around $96,000 and the 55 EMA is at $98,000. At this point, we should expect the price to drop further to test these lower supports. A close below $96,000 would open up various floor targets and effectively end the bull run.

This week’s outlook

A rebound from Friday’s lows is expected into Sunday night. A one-day close above this week’s first resistance level at $112,200 will be a tall order, and the price will likely need to make multiple attempts to have a chance of breaking above it. There is a slight “hope” support at the $106,900 level, so if the price reverses and turns lower earlier this week, we can expect this level to hold to give hope to the bulls. However, closing a day or two below this level would be a huge invitation for prices below $100,000 and support up to $96,000.

Market Mood: Bearish – Two weekly big red candles have been completed in a row, with heavy selling occurring both weeks. The bears have firmly established control and the downtrend may have just begun here.

coming weeks
On the bright side, the expanding wedge pattern is not broken yet. I would venture to say that it could even rise to $96,000 and reverse and still remain within that structure. Therefore, until price breaks out of this widening wedge pattern, we cannot definitively say there is a long-term ceiling. The bulls will need significant support to get back on track here, but anything short of a 50 basis point rate cut at the October 29th FOMC meeting will likely lead to further declines in the coming weeks. Bitcoin bulls will be begging Mr. Powell and his allies to throw them a bone here and give them a significant rate cut to give the market a chance to resume its long-term uptrend.

Terminology guide:

Bulls/Bulls: Buyers or investors who expect prices to rise.

Bear/Bear: A seller or investor who expects prices to fall.

Support or Support Level: The level at which the price of an asset should be maintained, at least initially. The more you touch the support, the more likely it will weaken and the price will not be able to sustain itself.

Resistance or resistance level: the opposite of support. A level where the price is likely to be rejected, at least initially. The more times you touch the resistor, the weaker it becomes and the more likely it is that you won’t be able to keep the price down.

EMA: Exponential moving average. A moving average that applies more weight to recent prices than previous prices, reducing the lag of the moving average.

Fibonacci Retracements and Extensions: Ratios based on what is known as the Golden Ratio, a universal ratio that relates to cycles of growth and decline in nature. The golden ratio is based on the constants Phi (1.618) and Phi (0.618).

Broadening Wedge: A chart pattern consisting of an upper trend line that acts as resistance and a lower trend line that acts as support. These trend lines must move away from each other to validate the pattern. This pattern is the result of widening price fluctuations, typically with higher highs and lower lows.