Bitcoin reached higher again on Friday, setting yet another local high just under the $19,000 level before finishing the day just under the daily high. This market is parabolic and continues to see late-stage momentum thrusts, but is running out of momentum.
Outlook: Bitcoin finished the week on a positive note, making another local high and closing the day not far from $19,000. Of course, it is suicide to short this market, as rallies as we have seen in Bitcoin lately are account-destroyers if you’re on the wrong side of them. However, if you’re not already long in Bitcoin, these current levels are a higher-risk entry, as Bitcoin will almost certainly pullback in the near-term as it runs out of gas and finds substantial resistance at $20,000, its previous ATH from 2017.
Look for a pullback to add at lower levels, incrementally if possible, but don’t be too conservative; this market moves fast, and once it gets going, your perfect entry pinky may not be hit. That being said, FOMO is likely helping to boost prices right now as BTC has gained some media attention again, so it’s usually best to avoid rushing into positions during emotional periods such as this.
Support: Look for support around $14,000, or frankly even $13,000 would be value at this point. The lower Bitcoin goes, the higher the chance of a violent bounce. On a late Nov/early Dec selloff, which is looking more and more sharp for Bitcoin given this blowoff top, I’m looking to buy dips.
Resistance: $20,000 is my target here on this rally. This is Bitcoin’s all-time high and a large, round psychological level. Any retail minnows who got sucked into the December 2017 mania and bought the top will likely be looking to break even, which probably are minimal, and that selling pressure will be a fraction compared to the technical selling after a full multi-year retrace. I think $20,000 is a tough resistance level that’ll put up a fight possibly into Q1 2021, but will inevitably fall as crypto in 2020-2021 is completely different and more evolved than speculation mania in 2017. As such, I am looking for a new ATH by early 2021 and a sustained bull market over the following couple of years.
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