The first week of October is coming to an end without significant changes in the crypto market’s largest capitalization assets. $BTC started the week with a bullish move that took it to the top of the sideways channel it has been tracing for the last few weeks, but the resistance zone consolidated leaving a rebound to the intermediate zone, which leaves a price very close to the price at the beginning of the month as can be seen in the 1h chart.
This sideways channel with resistance at $20.5k and support at $18k generates a range to follow closely, because if the price manages to break the resistance upwards it is likely to look for the next resistance at $22.5k, and if on the opposite side we detect a break of the support zone it could be a reactivation of the long-term downtrend. Since we are very close to the macro support zone and if it is broken it could generate a very sharp movement in search of $15k or even $12k.
The rest of the market has behaved unevenly. There were tokens that had very good results in September as $CHZ, $APE or $ALGO. There are also tokens that had been several weeks with a very low volatility but this week have been reactivated, such as $FXS or $EGLD that already accumulate +15% or $SUSHI, the native token of the decentralized exchange SushiSwap, which has a monthly result of +25% after this week’s breakout movement.
As we can see in the 1h chart, the price of $SUSHI had been forming a sideways channel for several weeks, very similar to the one that $BTC is tracing, but in this case the bullish breakout to resistance has taken place and the price has reached the next resistance at $1.40.
This breakout move was made on the 5th with the high above $1.14, which was confirmed by rising volume and the bullish RSI breakout at 70 and after making the pullback marked on the chart, generated +20% momentum.
Despite this week’s bullish move, the long-term situation of $Sushi is very bearish. The price has been in a downtrend since March 2021 which has seen the token devalue from $22 to the $1.38 at which it currently trades.
This situation implies that any movement like the one we have detected this week, would be made against the main trend. So it is always necessary to have a marked exit target and a tight stop to avoid risking much capital in case of reactivation of the main trend.
If we focus on the current situation, we see that the price is in an area of short-term resistance and coincides with the main trend line. Currently the movement has a bullish momentum, so I would like to raise different scenarios according to its evolution.
First of all, I would like to highlight the situation of the RSI, which remains above 70 and with a short-term bullish movement in line with the price. So the first scenario to take into account is the bullish continuation in the short term, provided that the sequence of rising highs and lows are maintained and that the RSI does not show signs of weakness with bearish divergences.
This scenario could lead us to test the next resistance at $1.60, although I emphasize that we will have to be very vigilant in case the situation is reversed.
If we begin to detect the symptoms of weakness with lower lows and lower highs or divergences in indicators such as RSI or MacD, the first area that can act as support is $1.15, although the most consolidated support is at $1, the area of the lows of recent months.
The most pessimistic scenario would be the break of this support zone, since the annual low is at $0.90 and any downward movement below these lows could be exponential, although at the moment there are no indications that this scenario could occur.
Finally, remember that nothing discussed in our articles can be considered as investment advice. Everyone must do their own analysis and develop their own trading strategy. The Belobaba Crypto Fund team only shows our analysis and investment tools, and how they help us in our operations when making decisions.