El Salvador Mines Bitcoin Using Volcanic Energy – Analysis, 4 Oct
This past week the positive news dominated the crypto market. On Tuesday, September 28th, the president of El Salvador Nayib Bukele mentioned that the country was preparing to launch the first Bitcoin mining facility using volcanic energy:
Three days later, on October 1st, Bukele tweeted that they had already started mining Bitcoin by using geothermal energy:
Good news came from the U.S. as well. Fed Chairman Jerome Powell said that the U.S. is not going to ban Bitcoin and cryptocurrency:
The positive news and events have intensified the bullish sentiment in the crypto community. Bullish forecasts on the price of Bitcoin have started to pop up one after another. PlanB, a well-known Bitcoin bull, published his BTC price predictions. He expects Bitcoin to surpass $63K in October, $98K in November, and $135K in December:
Jack Mallers, the CEO of Strike, the company bringing Bitcoin to El Salvador, mentioned in an interview on CNN that he expects BTC ‘to go well into the six figures this year’:
The change in market sentiment reverted the price correction this past week, and most of the major cryptocurrencies recorded decent price rebounds. Now, the Monday market starts with small consolidation. According to Coin360.com, one Bitcoin costs €41,068.76 (-0.33%), one Ethereum – €2,888.89 (-1.30%), one DOGE – €0.1832 (-1.18%), and one UNI – €21.77 (-1.28%):
Source: Coin360.com (Daily crypto market performance)
Now, let us look at the price charts of the leading cryptocurrencies against the euro in the most noteworthy time frames.
In the weekly time frame (1W), BTC/EUR has formed a Bullish Engulfing (common trend reversal pattern):
According to the Technical Analysis theory, a Bullish Engulfing is a candlestick formation occurring at the bottom of a correction. That is why it seems that the buying pressure is starting to increase, and the bulls are trying to regain control over the market.
Moreover, in the 4-hour chart (4H), BTC/EUR has exited the Bullish Flag (common trend continuation pattern) we talked about in our previous analysis:
According to the chart, a breakout took place, and the price has started to increase. In our view, this is an initial signal that the uptrend is resuming. It is worth underlining that both the weekly and the 4-hour time frames confirm uptrend renewal. That makes the signal more reliable.
Similar to the weekly (1W) price chart of Bitcoin, ETH/EUR has formed a clear Bullish Engulfing as well:
The Bullish Engulfing confirms the change of market sentiment – from bearish to bullish. That is why traders will look at the shorter time frames to make sure the other time frames also confirm the buy signal.
For example, in the daily chart (1D), ETH/EUR has rebounded from the lower line (trend line) of the Ascending channel (uptrend):
The renewal of the price increase within the channel is a clear bullish signal. Therefore, we expect the price to continue its journey within the channel and reach at least the level of the previous local highs (approximately €3,350).
Although most of the major cryptocurrencies have formed bullish candlestick formations, the Dogecoin bulls have not been able to overturn the bearish pressure so far. In the weekly chart (1W) of DOGE/EUR, the sequence of candlesticks with descending local highs continues:
As already mentioned in our previous analysis, we would like to see at least one solid bullish candlestick in the weekly chart (1W) to change our bearish sentiment.
Also, let us highlight that, in the 4-hour chart (4H), the price of Dogecoin is still within the Descending channel (downtrend):
We can become bullish on Dogecoin only if DOGE/EUR exits the channel in the upward direction. For now, we prefer to stay away from the market.
In the weekly chart (1W), UNI/EUR has formed a bullish candlestick after the Dragonfly Doji:
The combination of the Doji and the bullish candlestick increases the chances of renewing the uptrend. To spot the right moment to enter the market, let us have a look at the 4-hour chart (4H), where UNI/EUR has bounced off the neckline of the Double Bottom (common trend reversal pattern):
In our view, if the price of Uniswap surpasses the level of the previous local high or €23.30, a buy signal will appear, and, in this case, some traders will open long positions with stop-losses below the neckline.
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