Market News

Bitcoin’s weekly close above a key support level is “good news,” according to traders, and the day’s rally to $57,500 could be a sign that the bottom is in.

Bitcoin price edged above $57,500 on Sept. 9 as markets sprang back from an “exaggerated” reaction to August’s payroll report. 

Data from Cointelegraph Markets Pro and TradingView showed Bitcoin price action recording gains roughly 8.3% above the week’s $52,546 lows.

The day’s reversal in Bitcoin’s price direction has many traders wondering if the bottom might be in for BTC.

Bitcoin’s weekly close provided some “good news” 

Bitcoin’s recent drawdown accelerated on Sept. 5 after the August United States payrolls report came in slightly weaker than expected. What followed was a steep correction that saw Bitcoin price drop below $55,000 for the first time since Aug. 5’s “Black Monday.’

Despite the slowed weekend trading, however, Bitcoin price managed to recover some lost ground and now trades in a third consecutive bullish session on the daily timeframe. 

Bitcoin’s weekly close above $53,250 is “good news,” as it has acted to “protect the very bottom of the bargain-buying area (orange),” popular trader and analyst Rekt Capital explained in one of his latest analysis posts on X:

“To build on this momentum, Bitcoin would need to next reclaim $55,881 (blue) as support to try to reclaim the bottom of the black channel.”

Historically, “Rektember” has not been a kind month to risk assets, including Bitcoin. However, the trader believes that the last quarter of 2024 is likely to see the price of Bitcoin rise higher.

“You just need to survive September,” Rekt Capital said in a caption accompanying a CoinGlass chart showing Bitcoin’s monthly performance. 

“If history repeats, Bitcoin may be heading for three straight months of positive upside Monthly returns.”Bitcoin monthly returns. Source: CoinGlass

According to Swissblock Insights, September has historically seen a contraction primarily because “it is a time when summer gains are taken, and many companies set new objectives for the year’s final quarter.”

The analysts said that the Bitcoin risk index is at 99.62, “levels similar to those seen in mid-August,” following Bitcoin’s drop below $50,000. 

“The risk signal shows us that a bottom is not clearly defined,” analysts at Swissblock Insights explained, adding that it points to the possibility of a crash to lower levels. 

“Nevertheless, when we do see the Bitcoin Risk Index recede it may well be a good entry point, even if we are not back in the low-risk zone: The next spike up will probably be aggressive.”

The latest live data from monitoring resource CoinGlass showed Bitcoin bulls cutting through ask orders between $55,000 and $56,700. At the time of publication, the level at $57,000 drew the most liquidity to the upside, totaling $38.85 million.

Bitcoin short liquidations from Sept. 8 to 9 totaled more than $54.2 million, with the cross-crypto total at $135.86 million.

Bitcoin RSI fuels optimism

The BTC/USD four-hour chart shows a bullish divergence in the four-hour RSI preceding the price recovery seen over the last three days. The RSI is a trend-following oscillating momentum indicator used to assess whether a market is overbought, oversold or accumulating.

A bullish divergence from the RSI occurs when a decrease in price is accompanied by an increase in momentum, resulting in upward movements.

The bullish divergence could hint that the bulls are gaining control of the market and plan to push the price toward the 200-day exponential moving average at $59,000 in the short term.