Bitcoin pulled back on Tuesday, reaching as high as $11,730 before the sellers stepped in, closing the day around $11,400. This could be short-term profit-taking, negative covariance to the US Dollar's breakout today, or positive covariance to gold and equities' selling off today, with gold dropping as much as $50 over the last 24 hours.
(October 13, 2020 8:30 PM EST)
Outlook: Bitcoin found some resistance today, getting sold into just below the $12,000 level. This comes as the DXY bounced off major support, causing Gold to drop like a rock (get it?), both of which market developments are negative for Bitcoin. This is standard market behavior after breaking out, as nothing can go up indefinitely (see 2018). In fact, this is a very healthy looking chart. There is a lot of uncertainty and fear in the markets right now circulating possible COVID stimulus deals, the US presidential election, and the seasonality points to lower prices over the next few weeks before finding support. I can see this happening for Bitcoin as well, at least to some degree, although given the bullish -- well, everything about Bitcoin, I think pullbacks are probably muted, similar to the stock market. The difference is, Bitcoin's fundamentals support higher prices, not lower.
Support: $10,000 has been ironclad support, and higher yet there should be support between the 50 Day EMA around $10,750 and $11,000, both of which were highly contentious price levels dating back to the summer. Whenever resistance levels are defeated, they usually become new support levels. If BTC falls below $10,000, which I don't think is likely nor would it be for more than a few hours at most, look for support at the 200 Day EMA around $9,682 and then $9,000.
Resistance: This is a bullish looking chart, so I think Bitcoin isn't ready to roll over in spite of resistance at $11,500 - $12,000. It may take a couple of tries, but it is not a significant level, and Bitcoin has been churning up momentum for a while now - I wouldn't be surprised to see it break this level in the near future. If there's wind behind BTC's sails, $14,000, would be the subsequent target, then we can start talking about $20,000 again.
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