BTC’s Q3 is approaching and what can you expect in Q4?
- Bitcoin price has developed a bullish divergence with the RSI, suggesting more upside.
- Despite the upbeat technicals, investors should expect volatile swings before the end of Q3 2022.
- A break below and turning the $17,593 level into a resistance level will invalidate the bullish thesis for BTC.
The Bitcoin price is trading above two decisive levels, suggesting a stable footing. Combining this outlook with a bullish divergence signal, BTC holders should expect a favorable outcome. But since the third quarter ends in a few hours, there is bound to be abnormal volatility in the market, which could trigger massive moves in either direction, so investors need to be cautious.
Bitcoin price and the start of a new quarter
Bitcoin price formed a firm bottom on June 30 at $19,230, which was followed by a 31% rally that set up a swing high of $25,205. After that, an exhaustion of the move’s momentum combined with investors booking profits saw the markets reverse and resulted in a 27% crash that formed a new low of $18,210 on September 19.
These lower lows may indicate a bearish outlook, but the Relative Strength Index (RSI) shows that while the price fell, it rose, indicating a bullish divergence. This technical formation reveals a lack of selling pressure and could be a signal that the market will turn around and start moving higher.
As sellers lose steam, the Bitcoin price will reflect what can already be seen in the momentum – a bullish resurgence that triggers a rally. The resulting move could push BTC up by 20% before meeting the 200-week simple moving average (SMA), which is the main hurdle.
If the momentum is strong enough to reverse this blockade, the Bitcoin price could reach the next resistance level at $29,563. This move would represent a 48% gain from the current position and is likely where the upside is limited for the major crypto.
BTC/USDT 3-Day Chart
Assess other prospects using the quarterly BTC chart
While the three-day chart for the Bitcoin price shows signs of bullishness, the quarterly chart is less so. Instead, it reveals two important barriers:
- A resistance area, from $27,734 to $29,296.
- A support block from $13,880 to $19,666.
From a macro perspective, the support block has been extremely helpful in helping buyers and absorbing the incoming selling pressure. Therefore, the possibility of a bounce from the current position to $29,296 makes logical sense and is also consistent with the narrative described above.
Furthermore, a reversal of the resistance area could allow the Bitcoin price to extend its gains from 48% to 68% as it tests the Fair Value Gap (FVG), also known as imbalance, at $32,950.
BTC/USD 3-month chart
While the fact that today is the last day of 2022’s third quarter adds plausibility to the bullish outlook, there is likely to be massive volatility, which could push the Bitcoin price in either direction, and you may want to avoid trading before the end of the quarter.
Investors should also consider the possibility of a market manipulation pushing the Bitcoin price to sweep the June low of $17,593.
On the other hand, if sellers take control and push the Bitcoin price to produce a three-day candlestick close below the September 19 swing low of $18,210, it will invalidate the bullish divergence and thesis outlined above.
In such a case, market participants should consider digging deeper into the support box at $13,880 to $19,666. This move could push the Bitcoin price to retest intermediate support at $15,550
