Bitcoin: BTC/USD (BTC=X) Risks a Larger Pullback in the Fourth Quarter

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Ticker: BTC=
Price: $10841.87

Bitcoin Outlook

Bitcoin price is showing weakness after another sharp rejection from the $11,000 resistance level. As Bitcoin (BTC) enters the fourth quarter, the sentiment around the market remains generally cautious and neutral.

Bitcoin might face a larger pullback in the fourth quarter due to several key factors. Throughout the past three years, every September monthly candle has closed red. The September monthly candle for 2020 is also on track to close as a red candle, indicating a lack of direction.

From March through August, favorable financial conditions, a low-interest-rate environment and a multitrillion-dollar stimulus package caused Bitcoin and stocks to rally in tandem. In the upcoming months, due to the United States presidential election in November, the probability of a delayed stimulus approval is increasing. The growing uncertainty around the macro landscape and the financial markets in the U.S. could pressure BTC.

As a potential area of interest, traders are considering the $9,600 CME gap that forms when Bitcoin price rises or falls below the CME Bitcoin futures market price after it closes for weekends or holidays. The $9,600 gap has yet to be filled, and given the tendency of most CME gaps to get filled, the level remains a target.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 10,584.86.

The projected upper bound is: 11,571.69.

The projected lower bound is: 10,074.47.

The projected closing price is: 10,823.08.


A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with FOREX BTC=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 52.8840. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 51.79. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 55 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 39. This is not a topping or bottoming area. The last signal was a sell 11 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed up 126.460 at 10,837.960. Volume was 89% below average (consolidating) and Bollinger Bands were 44% narrower than normal.

Open         High         Low         Close          Volume
10,702.550   10,877.000   10,694.970  10,837.960     75,197
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period      50-period         200-period
Close:           10,671.01      11,047.58         9,370.55
Volatility:      32             43                68
Volume:          428,198 69     5,555 58          9,153

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


FOREX BTC= is currently 15.7% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods.

Our volume indicators reflect volume flowing into and out of BTC= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 4 periods.

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