BTCUSD – Benefitting from Being AlternativeBTCUSD broke above 120000 for the first time since mid-August on Sunday, briefly recorded a new all-time high of 126304 yesterday before edging back lower and consolidating its gains so far this morning (124100, 0730 BST).
This move to new highs has been relatively constant by recent BTCUSD standards. Prices were languishing at 3-month lows around 10800 on September 26th, but since then it has recorded 10 out of 12 up days, led higher by increased expectations for Federal Reserve interest rate cuts at their next meetings in October and December, alongside a shift by investors into alternative assets to diversify away from major currencies like the US Dollar (USD), UK Pound (GBP), Japanese Yen (JPY) and Euro (EUR) as concerns increase about the sustainability of government debt burdens, fuelled by the spending requirements of those in power.
These issues have been highlighted recently by the US government shutdown, choice of pro spending candidate Sanae Takaichi as Japan’s new prime minister, on-going issues surrounding UK Chancellor Reeves Autumn budget plans and the resignation yesterday of new French Prime Minister Lecornu after only 27 days in office as the country struggles to get its finances in order.
Looking forward, whether BTCUSD prices can sustain a move to higher record levels or instead see a correction back to the downside may be determined by factors such as risk sentiment remaining positive, alongside the ability of the technical outlook to remain constructive, 2 factors that can change quickly in the current environment.
Technical Update: New All Time Highs
Between the September 26th low and the October 6th high, Bitcoin rallied 16.27% in a near-uninterrupted stretch of price strength, culminating in a new all-time high of 126304 on Monday.
As the chart above shows, despite a correction from the latest 126304 high, fresh attempts to extend the advance could remain on the cards. Momentum still appears tilted toward further attempts to move higher.
However, breaks into new all-time high territory don’t guarantee a sustained advance. It’s therefore prudent to monitor key support and resistance levels to help gauge where the next directional risks may emerge. These levels can offer clues on whether momentum is likely to continue or fade.
Possible Resistance Levels:
Sellers have emerged at the 126304 level, and this area now looks set to act as the initial resistance. Traders will likely monitor how price behaves around 126304, particularly on a closing basis, if retested this week.
When price breaks into new all-time high territory, identifying valid resistance becomes challenging. However, Fibonacci extension levels can offer useful reference points.
If Bitcoin sees a closing break above 126304, attention may shift toward 131090, the 38.2% extension of the September 26th to October 2nd rally, even potentially 135145, the higher 61.8% level.
Possible Support Levels:
As already noted, Bitcoin has seen an almost uninterrupted phase of strength since the September 26th low, which may now prompt concerns about price over-extension. Some traders may begin to assess the risk of corrective pullbacks from these elevated levels.
However, for corrective themes to gain traction, it may require a closing break below the recent 121525 low (October 4th), which marked the last rally point for price. While breaks below this support are not an outright negative move, such activity could open the way for tests of 119557, which is the 38.2% Fibonacci retracement of the latest advance, possibly 117471, the deeper 50% level.
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