Bitcoin has been stuck in a slow decline in September, with neither bulls nor bears able to spark a clear trend.
Bitcoin trendline offers chance for “bargain-buying”
Bitcoin’s (BTC) price performance has failed to impress so far this month, and BTC/USD is on the way to forming classic September losses, data from Cointelegraph Markets Pro and TradingView show.
Large-volume investors are staying on the sidelines, with the area around $26,000 already an all-too-familiar home for Bitcoin in 2023.
The current spot price is surrounded by trendlines, which analysts argue are helping to restrict volatility. Bitcoin lost some support levels in August as it dropped over 10%, chief among these being the 200-week moving average (MA).
Commenting on a chart of levels to watch, popular trader and analyst Rekt Capital noted the significance of the 200-week MA in bear markets.
“For most of Bitcoin’s history, the 200-week MA […] has acted as a generational bottoming out region,” he wrote in his latest newsletter.
Rekt Capital noted that the current four-year price cycle is treating the trendline differently than before.
“In March 2020, BTC experienced downside wicking below the 200-week MA but still [maintained] the 200-week MA as support. In this cycle however things have been different: BTC formed an Accumulation Area below the 200-week MA,” he continued.
“And even though BTC recently flipped the 200-week MA into new resistance, as if suggesting that price could stay below this key MA in the coming weeks, the principle remains the same that this MA will represent bargain-buying opportunities for those investing in BTC for the long run.”
The 200-week MA stood at $27,680 as of Sep. 5 — around $2,000 above the spot price.
Dollar strength challenges macro calm
With the United States on holiday on Sept. 4, there was less chance for a significant trend change in crypto markets over the weekend.
That could change on Sept. 5 as Wall Street returns, but for the time being, “out-of-hours” BTC price action is characterizing the landscape.
The U.S. Dollar Index (DXY), known to inversely impact BTC price movements in times of volatility, is meanwhile building on an uptrend that’s been in place since mid-July.
Up 0.5% on the day, DXY is challenging a recent local high from late May.
“Resistance is now support,” popular trader TraderSZ told X subscribers about dollar strength on monthly timeframes.
Continuing, TraderSZ warned that Bitcoin may suffer as a result — with even a return to a CME futures gap near $20,000 a possibility.
If correct on $DXY idea, then I see no reason why we can’t fill that $BTC gap easily and it would just be a move back into the range
Looking at the chart, it’s breaking down. https://t.co/pmq0Erb5Xt pic.twitter.com/hOHWOwwV1y
— TraderSZ (@trader1sz) September 4, 2023
Supply and demand keep BTC price range intact
Closer to home, supply and demand zones are of interest to popular trader Skew, with a potential dip limited in scope to above $25,000.
Related: Weekly close risks BTC price ‘double top’ — 5 things to know in Bitcoin this week
Acknowledging that “not much has changed” intraday, Skew uploaded charts to X (formerly Twitter) showing the likely boundaries of future price moves.
To go much higher, Bitcoin bulls would need to reclaim a 12-hour range low at $26,200, he said on the day, or “else price grinds towards 12H Demand again & lower.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
