Today is our National Day, and it is also the day of the U.S. government shutdown. The U.S. stock market began to decline due to news influence, but unexpectedly, Bitcoin suddenly rose, creating a bullish candle, with Ethereum following, leading to a broad rise in the entire cryptocurrency market. Let's review our previous views; there are two points that were mentioned more often. First, this pullback allows for a breach of 110000, but it cannot remain below that level for a long time without recovering. The second point is that there is not much downward space left, so there is no need to panic.
Back to the trend, Bitcoin broke through 110000 on September 25, hitting a low of 108631. The long bearish candle had almost no lower shadow, and on the second and third days, small K-lines showed weakness and consolidation, typical of a downward continuation pattern, then began a slight rebound, accelerating today. Looking back now, the trend in the days after the 25th is very misleading. In the latter half of this round of market, long bearish candles with no lower shadows began to appear, important support levels were broken, and weak fluctuations below the support level increased, struggling yet suddenly pulling up, which is clearly aimed at trapping technical traders... There are only two ways to respond: one is to expand the buying range and buy in batches, and the other is to enlarge the stop loss, having a big heart! But the drawbacks of doing this are also very obvious; batch trading will reduce profits, and enlarging the stop loss will lead to significant waterfall losses when the market drops. There is no perfect solution in the world; how to choose is up to the individual.
Currently, the market is at a critical position since Bitcoin has reclaimed a key level. We are returning to the previous thought that Bitcoin will test the range of 117500-119500. It is now just a step away from the lower pressure of 117500, and we expect a pullback upon hitting resistance before continuing to surge towards 119500! Once it reaches that point, this segment of the market may come to an end. How to assess this will be determined after we get there! Ethereum's adjustment still seems a bit off, let's mainly follow the trend. The pressure at 4330 has already been touched today, with support at 4110. Continuing from yesterday's topic, let's discuss the impact of the U.S. government shutdown. Bitcoin is not following the usual path and is not colluding with the U.S. stock market; instead, the government shutdown has led to a price increase, which is indeed unexpected. If we must explain, we can only say that the price of cryptocurrencies is largely supported by powerful narratives and cyclical models. For example, Bitcoin increased by 14% during the government shutdown in 2013 (bull market), while it decreased by 6% in 2018 (bear market). This indicates that during a strong upward cycle, the demand for cryptocurrencies can completely disregard short-term external political noise. The current market environment, with the growth of Bitcoin demand in the fourth quarter, is more akin to the situation in 2013!
