Author: Rizqie Atsir Fadhlullah, Busdev Tokenomy
Bitcoin has shown quite an impressive rally in the past few weeks. This positive response came behind the approval of the Bitcoin ETF (Exchange Traded Fund). Speculators argue that the ETF will make it easier for investors to take part in the crypto market without having to mine Bitcoin themselves.
Bitcoin has been very bullish throughout this month. This is based on the approval of the Bitcoin ETF by the US Securities and Exchange Commission (SEC). Speculators believe that this will have a very positive impact, especially in bringing larger institutions into the crypto market. VanEck, Invesco, Valkyrie, and Galaxy Digital are among several investment firms that have applied to the Securities and Exchange Commission (SEC) to launch bitcoin ETFs.
Before we get into the technical stuff, let’s talk a little bit about what a Bitcoin ETF is and how it works. An ETF is a type of investment that can track the performance of a specific asset or group of assets. ETFs allow investors to diversify their investments without actually owning the assets themselves.
For individuals who want to focus solely on profits and losses, ETFs provide a simpler alternative to buying and selling individual assets, Many ETFs target the same type of asset—for example, a common focus on sustainability, or stocks that represent specific industries and related businesses. This allows investors to easily diversify their holdings.
The Bitcoin ETF is a derivative asset of the world’s most popular cryptocurrency. This allows investors to buy into the ETF without going through the complicated process of trading Bitcoin. In addition, since ETF holders will not be directly invested in Bitcoin, they will not have to worry about the complicated storage and security procedures that crypto investors require.
Bitcoin Technical Analysis
Bitcoin hit $64,000 on Tuesday (19/10) afternoon, surging by over 40% from its September low of $40,000. Now bitcoin is less than 1% from its all-time high of $65,000.
In the analysis above, it can be seen that there are 2 resistance levels that have been successfully broken through, namely $52,000 and $60,000. This breakout occurred after the price had corrected to $40,000. At the time, many beginners were actually trapped and short selling in the futures market because they thought Bitcoin would be bearish.
If the fundamental reason behind Bitcoin’s soaring to its highest price was due to the approval of the Bitcoin ETF, did Bitcoin’s bullish movement technically just happen unpredictably? Of course not. As stated in the previous week’s analysis, before the news appeared, we already foresaw that the price would be bullish soon after it successfully rejected the $40,000 support level. Please take a look at the analysis below.
Let’s look back to September where Bitcoin had a correction from $52,000 to $40,000. When experiencing a correction, Bitcoin forms a movement pattern called a “channel down”. The channel down that is formed in a bullish market is the best correction zone or “retracement” or “secondary reaction” that we have used to make a buy. Now consider the following analysis again.
The main indicator for the end of the “correction” or “retracement” period can be seen when the price broke out of its correction structure. In this context, the correction structure of the Bitcoin movement is the channel down pattern. When the price broke through the channel, there were 3 resistance levels that were the target of Bitcoin’s movement. The first was at $52,000, the second at $60,000, and the third all-time high of $65,000.
At the time of this analysis, Bitcoin is only a few points away from its high. No sign of a trend reversal and fundamental support makes the breakout opportunity higher. In fact, we can predict that the breakout chance is 90%. Then the next question is, where is the next direction?
We use “Fibonacci retracement” to measure the target area of Bitcoin movement if there is a breakout. Based on the Fibonacci theory, if the market penetrates its all time high, the target will be in the area of the golden ratio of 1.618 and 2.618. And in the analysis above, the area of 1.618 is around $57,000. So if Bitcoin manages to break through $65,000, then the closest target is $87,000. However, if there is a rejection, the price could be corrected again to support $52,000. For those of you who do not have a “buy” position, it is not recommended to open a “buy” position or buy Bitcoin in this area, because the price is too high and too risky—especially for traders in the futures market.