Bitcoin exploded to the upside on Wednesday, shooting straight through $12,000 and reaching as high as $12,900 as the day closed. After hours, we have already seen Bitcoin reach above $13,000. After calling this breakout yesterday and the price action leading up to it, we are now looking at price targets and retracements for additional value-hunting before the party really gets going.
(October 21, 2020 8:00 PM EST)
Outlook: Bitcoin exploded to the upside today amid news that PayPal announcing it will allow its 350+ million users to buy, sell, and hold cryptocurrency by 2021. This is a huge sign of validation as institutional and mainstream adoption will be a significant driving force in including millions more new users and investors to Bitcoin and crypto as a whole. As we wrote last week, one of the biggest possible catalysts for a Bitcoin bull market in 2021 would be mainstream adoption of Bitcoin by a FAANG company (Facebook, Apple, Amazon, Netflix, Google, etc.). PayPal is one of the most popular US and international payments platforms in the world, and is likely the first domino to fall making way for others to follow. I don't think this is a matter of 'if'; I think it's a matter of 'when.'
Support: Look for support around $11,000 which is former resistance and near the 50 Day EMA. Below that, $10,000 should be a huge support level, which is also now buoyed further with the rising 200 Day EMA just below. I don't quite consider $10,000 to be my line in the sand quite yet, but I do view it as the single strongest near-term support level of Bitcoin.
Resistance: Now that we've cleared what may have been the last major resistance level, we can start looking for price targets. Now, I'm not saying just because Bitcoin broke through $12,000 that it's going to shoot straight up to $20,000. Psychologically, there will probably be a bit of resistance every $1,000. In fact, $13,000, which we have touched after-hours, was the 2019 highs, so that would be a natural resistance point, and probably the last major one before $20,000. Even if Bitcoin retraces from $13,000, that's okay, because just reaching it again shows that we are in an uptrend and grinding higher to levels not seen in well over a year. It might be a bit of a grind higher, but that's okay, because that is indicative of a healthy market. Bitcoin is just getting started, buckle your seatbelts.
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