An Incrypted market analysis said Bitcoin’s short scenario played out during the latest five-session stretch as an early rally gave way to a prolonged correction and the unwinding of late long positions. The moves matter because Bitcoin and Ethereum are testing key technical levels before a week of major U.S. economic releases that could drive volatility in the dollar and cryptocurrency markets.

The analysis reflects the author’s personal opinion and does not constitute financial advice or a call to action. Incrypted said it is not responsible for readers’ investment decisions.

Bitcoin falls below four-hour imbalance

Bitcoin traded around $83,017, directly below its local four-hour fair value gap, or 4H FVG. The cryptocurrency had entered the $86,000-$88,000 target block and swept liquidity above the May high before reversing.

Buyers made several attempts from Thursday to reclaim the overhead imbalance, but failed to close above it. The analysis said a structure of lower highs had been in place since Sept. 23, while the four-hour relative strength index had fallen to 40 after hovering near 50 in the middle of the previous week.

Resistance lies at $84,000-$85,000, followed by the previous week’s highs at $87,385.1 and $88,078.2. Downside reference points include the previous month’s high at $81,500, the previous week’s lows at $80,819.4 and $79,459.6, and an unfilled 4H FVG at $78,000-$79,500.

Bitcoin futures open interest declined from 109,640 to 96,010 contracts, shedding more than 13,000 contracts over the week. The analysis attributed the rally to leveraged derivatives positions and the subsequent decline to forced risk reduction.

Three scenarios were outlined: a failed rebound into $84,000-$85,000 followed by further losses; sustained four-hour closes inside the imbalance and a recovery toward $87,385.1 and $88,078.2; or a direct sweep below $81,500 and $80,819.4 before a return to $84,000-$85,000. The corresponding charts are available through TradingView, TradingView and TradingView.

Ethereum shows relative resilience

Ethereum traded near $2,646 at the lower edge of its 4H FVG after reaching the previous week’s high of $2,806.76 and reversing. Its structure has remained bearish since Sept. 22, with successive lower highs, although it has held up better than Bitcoin and had not tested the previous week’s low at $2,626.01.

Upside levels include the $2,675-$2,725 resistance block, $2,769.29 and $2,806.76. Below current prices are $2,626.01, a 4H FVG at $2,575-$2,600, the previous month’s high at $2,566.40 and $2,546.20. Lower imbalance zones sit at $2,500-$2,530 and $2,460-$2,475.

Ethereum’s four-hour RSI declined to 40 from 66 a week earlier. Open interest fell from 2.39 million to 2.30 million, indicating that leverage accumulated during the breakout had been only partly unwound.

The analysis considered a rejection from $2,675-$2,725 and decline through $2,626.01; sustained closes above the imbalance followed by a move through $2,769.29 toward $2,806.76; or a brief spike to $2,675 that sweeps short-position stops before a rapid fall toward $2,575-$2,600 and $2,546.20. Charts for those scenarios are available through TradingView, TradingView and TradingView.

Dollar index approaches macro-heavy week

The dollar index rose above 100.564 after strong PMI data and reached 101.398 before easing to 101.093. Its four-hour RSI cooled from 79.5 to 61.50, while the index remained in the upper third of its ascending channel.

Resistance stands at 101.398, followed by 101.600-101.700. Support includes daily fair value gaps at 100.700-100.950 and 100.450-100.564, the previous week’s low at 100.179, the previous month’s high at 100.083 and a four-hour imbalance extending to 99.700.

The analysis outlined three possibilities: a sweep above 101.398 followed by a correction toward 100.500; support at 100.700-100.950 and an advance beyond 101.398 toward 101.700; or a cascading decline through 100.700, 100.450 and 100.179 toward 99.700. The scenario charts are available through TradingView, TradingView and TradingView.

Scheduled releases include CB consumer confidence and JOLTS job openings on Tuesday, Sept. 29; ADP employment, final second-quarter GDP and core personal consumption expenditures data on Wednesday, Sept. 30; initial jobless claims and the ISM manufacturing index on Thursday, Oct. 1; and nonfarm payrolls, unemployment and average hourly earnings on Friday, Oct. 2.

Source: Incrypted