Bitcoin: technical analysis, October 24, 2023

Hello from the crazy crew at Altcoin Wonderland!!! It’s Tuesday, October 24, 2023, and it’s time to look at what’s next for Bitcoin, which obviously affects the whole crypto market. Congratulations to everyone who made profits from Bitcoin’s crazy rally!

Why did Bitcoin rally so wildly?

Beyond the Bitcoin spot ETF narrative and its approval, which looks like it’s coming soon, there was another event in the macro arena that nobody noticed or mentions as noteworthy! Last week saw the biggest “injection” of bank liquidity into China’s market since the market crash of March 2020. Global liquidity, mainly in the US and then in China, has been shown to correlate positively with the price of Bitcoin. So it’s no surprise at all that Bitcoin is rising with these two catalysts for a higher price!

What happens now and what should we expect?

No one can know or say for sure what will happen, but as traders we look for opportunities in both directions of the price! Let’s look at the most likely scenarios.

Bitcoin monthly chart

Looking at the monthly chart from a different angle, we can say we are testing the middle of a large Bitcoin price range between 65K and 17K.

There are  monthly fair value gaps that Bitcoin hadn’t filled at 32K–38K and around 55K. Right now we are filling the gap at 32–38K, which is also where the middle of the range is.

A possible scenario is that we reach 40K as a range deviation and then go back to 31K–32K to test it as support. In other words, Bitcoin may not give us the chance to first go to 31K and test it as support, but may keep rising instead.

As things look now, the best risk/reward (r/r) scenario would be either to go long if we first test 31–32K as support, or to short at 40K.

Bitcoin weekly chart

We closed the week above the 200-week moving average, a very positive sign that shows it wants to keep going up. But let’s look at a scenario that would be negative for Bitcoin and an opportunity to short IF it plays out. As things look right now the odds are low, but it’s good to be aware of it!

If the price falls back below 31.8K, that would be a sign of a further drop. The most likely scenario now, however, is that we keep going up.

That’s it from me. Keep going strong, folks, and be careful! Always use risk management, stop losses and proper position sizing. Happy trading! Thanks a lot!

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