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▲ Bitcoin (BTC)/ChatGPT generated image
Bitcoin (Bitcoin, BTC) has regained its long-term bullish signal, but the September correction warning remains alive.
Lark Davis, host of the crypto podcast The Lark Davis Show, noted in an episode on September 1 (local time) that Bitcoin closed its monthly candle above the 10-month and 20-month Exponential Moving Averages (EMA). Davis evaluated the recovery of the 10-month line on a monthly candle basis as an important signal of a bullish trend. Similar monthly candles appeared in May 2019 and March 2023. Bitcoin also crossed back above the 40-week Simple Moving Average (SMA). Davis explained that in past major bear markets, the recovery of the 40-week line occurred after the cycle low.
In the short term, September seasonality is a burden. Davis pointed out that there have been no cases where Bitcoin rose continuously from August to September after an August surge. In August 2013, it rose 30% and then fell about 2% in September, while the August gains in 2017 and 2021 were 65% and 13% respectively. He assessed that past September declines were closer to corrections after strong Augusts rather than major crashes. The Moving Average Convergence Divergence (MACD) also shows a possibility of a bearish crossover, leaving open the possibility of retesting the 20-day Exponential Moving Average.
Ethereum (Ethereum, ETH) is also entering a decisive phase, according to analysis. Davis reported that Tom Lee's BitMine additionally purchased 51,000 ETH. While a bull flag is maintained on the Ethereum chart, a bearish crossover of the Moving Average Convergence Divergence has been confirmed. Davis viewed a retest of the Exponential Moving Average as a normal correction. He suggested a strong breakout above the bull flag or a correction to around $2,300 as the next trading opportunity.
On the other hand, a strong warning was issued for the memecoin market. According to the data presented in the video, only 4% of FOMO users made a profit. Most of their profits were also less than $100. On the Robinhood Chain, 22,600 new tokens were created in a single day. Davis described investors chasing dozens of tokens simultaneously as a 'dopamine trap'. He advised that if trading is not one's main profession, it is better to hold major assets like Bitcoin, Ethereum, and Solana (Solana, SOL) for the long term.
Speculative fervor is spreading to the area combining tokenized stocks and memecoins. According to the video, Bonercoin surged by approximately 200,000% in three days, with a daily increase of about 1,000%. The concept of linking it with tokenized HIMS stock to induce a short squeeze in actual stock was also put forward. However, liquidity was only $2.5 million, while the market capitalization was presented at around $55 million.
[Article Key Summary]
-Bitcoin strengthened its long-term bullish signal by recovering the 10-month and 20-month Exponential Moving Averages and the 40-week Simple Moving Average.
-However, there is no precedent for continuous gains from August to September after an August rise, and the short-term Moving Average Convergence Divergence also shows bearish signals.
-Among FOMO investors, only 4% made profits, while 22,600 tokens flooded the Robinhood Chain in a single day, intensifying speculative overheating.
*Disclaimer: This article is for investment reference only and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*
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