BTC managed to close back above the critical 200-day moving average, boosting near-term technical momentum, driven by strong spot buying.
The price pushed above a declining channel, signaling a near-term breakout to the upside. The 4-hour bullish divergence from the past few days gave an early signal of a potential bottom at $42.8k. Near term, it is very important for BTC to hold the 200-day moving average as support and reclaim $47.2k, a technical and on-chain level of resistance.
Golden Cross on the Daily Chart
The well-known golden cross has occurred, where the 50-day moving average crosses above the 200-day moving average. This is a classic technical signal of further upside. Although bullish, we have to wait for validation because this signal is not the most reliable when it comes to predicting BTC price action.
![IMG_5427-min-scaled.jpeg](https://cryptopotato.com/wp-content/uploads/2021/09/IMG_5427-min-scaled.jpeg)
Ideally, the BTC bulls need to see the price push higher in the next few weeks to validate the golden cross.
Key Support Zone Tested
The huge leverage liquidation to $42.8k tested multiple highly confluent support levels and so far, BTC has held support on a closing basis. These confluent levels include a rising trend line connecting the higher highs made since June 2021 at $43.3k, the 21-day moving average on the 3-day chart at $43.7k, and the 21-week exponential moving average at $43.5k.
![IMG_5417-min-scaled.jpeg](https://cryptopotato.com/wp-content/uploads/2021/09/IMG_5417-min-scaled.jpeg)
![IMG_5418-min-scaled.jpeg](https://cryptopotato.com/wp-content/uploads/2021/09/IMG_5418-min-scaled.jpeg)
For the past week, BTC wicked to these levels twice and held support on a closing basis.
On-chain Remains Bullish
The near-term pullback continued to strengthen the overall trend in on-chain metrics. Spot exchange reserves continued to make multi-year lows as investors continued to withdraw BTC from exchanges. Once again, 3 to 6-month-old coins accumulated mostly between $50k to $64.8k were sold at a loss and scooped up by strong hands. In aggregate, Bitcoin miners keep accumulating with reserves increasing despite the nearly 19% correction from $52.9k.
Chart by CryptoQuant
![IMG_5421-min-scaled.jpeg](https://cryptopotato.com/wp-content/uploads/2021/09/IMG_5421-min-scaled.jpeg)
There are no major warning signals of whale exit liquidity, which occurs during bear markets where large long-term holders of BTC sell aggressively during rallies. As of now, the data strongly suggests that BTC is in a bull market continuation, and a significant rally to new highs is likely if the bullish on-chain trend continues.
BTC Outperforming Stocks
Notably, BTC has started to outperform stocks, managing to close higher by 4.7% while the SPX closed lower by .57%. The dollar has been trending lower even with risk-off in stocks.
Normally, when there is fear in the market, investors sell stocks and go into the dollar, causing it to rise. In addition to bullish on-chain data, BTC’s near-term recovery could also be fueled by investors rotating out of the dollar into BTC. Keep in mind, a falling dollar is very bullish for Bitcoin.
![IMG_5424-min-scaled-e1631704550289.jpeg](https://cryptopotato.com/wp-content/uploads/2021/09/IMG_5424-min-scaled-e1631704550289.jpeg)
Historically, major risk-off events in stocks have also caused BTC to correct. Near term, it is good to see Bitcoin diverging from the risk-off environment. The bulls need to see the technical momentum continue higher and to also validate the widely discussed golden cross.
With the overall trend in fundamentals, technicals, and on-chain metrics stronger than ever, it’s looking more likely for BTC to start reclaiming $47.2k to $50k in the coming week. The best-case scenario for the bulls would be reaching $55k to $58k by the end of the month, which has a major technical and on-chain zone of resistance. If BTC can successfully close and stay above the $55k to $58k zone, the path to new all-time highs looks highly likely to be achieved in October 2021.