Bitcoin is expected to post the first monthly gain since June. However, the percentage increase can be less than 10% because the daily chart indicates signs of depletion on the part of the buyer.
A triangle breakdown on the hourly chart, if confirmed, could result in a decline of $ 8,820.
A break in the high volume contraction triangle will likely result in a new test of recent highs over $ 10,000.
Bitcoin (BTC) is about to end a series of three-month losses after recovering from the last lows of about $ 7,400 observed last week.
Cryptocurrency number one is currently priced at $ 9,200 on Bitstamp, an increase of 11% over the October 1st opening price of $ 8,304.
If confirmed, closing would be the first monthly gain since June, with cryptocurrency falling by 6.27%, 4.8% and 13.51% in July, August and September, respectively. The three-month downtrend is the longest since January 2018.
Bitcoin fell by 6.27% in July, ending the series of gains over the last five months, from $ 4,000 to $ 13,880.
The rise in October would be the sixth monthly gain of 2019.
It should be noted that BTC was trading at lower levels in four months less than $ 7,400 a week ago and appeared to be posting a loss for the fourth consecutive month.
The trend, however, reversed in favor of the bulls on Friday and Saturday, when bitcoin jumped 42% from $ 7,500 to $ 10,350.
The monthly gain would have been more than 20% if the cryptocurrency had kept gains above $ 10,000. BTC, however, has quickly returned to four figures and has recorded solid bilateral activity between $ 9,950 and $ 9,050 over the past 48 hours.
The technical charts indicate that the probability of the BTC falling below the monthly opening price of $ 8,304 is low. However, prices could fall to $ 8,820, the former support turned into resistance, in which case the monthly gain would be less than 10%.
BTC has drawn a narrower price range or a contractual triangle on the hourly chart. A trough below the lower edge, currently $ 9,100, would confirm the break of the triangle and could accelerate the correction to $ 8,820.
A violation of these rights would expose the next support to $ 8,474 (horizontal line), although now a sustained fall below $ 8,820 seems unlikely.
In addition, the main cryptocurrency is likely to challenge recent highs of more than $ 10,000 if the contracting triangle ends in a volume break. At the time of writing, the top edge of the triangle is seen at $ 9,500.
Daily and 4 hour tables
The repeated absence of gains above the 100-day moving average and Monday's daily red candle with the long upper shadow indicate the buyer's exhaustion.
In addition, the 4-hour line graph indicates a channel break – the consolidation ended in a downward break, opening the door to a deeper retreat.
As a result, the probability that BTC is outside the restrictive price band of the hourly chart is high.
Monthly and weekly charts
Bitcoin closed well below the low of $ 9,049 in September (top left) in September, confirming a decline in the declining price range represented by consecutive domestic bar candlesticks created in July and August.
This bearish candlestick model is still valid as prices are well below the $ 10,949 high in September.
Traders, however, do not need to wait for a bull market confirmation above $ 10,949 and may be bullish if prices were successful in ending the week (Sunday, UTC) above $ 10,949. $ 9,725. This would confirm a downward channel escape on the weekly chart (top right).
Disclosure: The author does not hold any cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View