Bitcoin rose a bit on Tuesday, printing a new high around $19,500 before ultimately closing the day around the $19,000 level. Bitcoin continues to grind higher, working its way toward the previous ATH at $20,000, which is where its reaction will tell us where it's headed afterwards.
Outlook: Bitcoin grinded higher on Tuesday, taking another dig towards the $20,000 price point before pulling back a little bit to close the day on a slightly bullish note. Bitcoin continues to put in new local highs nearly everyday, which, of course, is not sustainable, but I think this rally's ultimate goal was to touch the previous ATH at $20,000. Ultimately, once it does -- and it might even break above it for a day or so, I think Bitcoin is overdue for a pullback, as it is overbought and, frankly, hasn't really had any hiccups since the first week of October. I'm looking for a celebratory cresting of $20,000 followed by a healthy and well-deserved pullback, probably of the 20-30% range, which takes Bitcoin down to $14,000 or $13,000 if we're lucky, which I consider to be the last stop to board the train before it leaves the station for good.
I think the days of sub-$10,000 Bitcoin are behind us. The cold hard fact is that COVID-19 and the Fed's massive QE response has changed the US and global economy for the forseeable future, as any market or economic weakness will clearly be met with massive money-printing campaigns. Obviously, this is not a sustainable long-term solution, however, in the short-medium term, this strategy will have major implications on investable assets, artificially boosting their prices -- Bitcoin included. That's not to say COVID-19 and subsequent QE is responsible for Bitcoin's bullishness - I simply think it accelerated the process. What's yet to come, however, is how much it accelerates Bitcoin's price appreciation, which, I think, will give a higher rise than was previously anticipated. Whereas $100,000 Bitcoin was a grandeur target before, it's now starting to seem very conservative in the wake of skyhigh stock market valuations and soaring real estate price-tags.
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. On longer-term Weekly chart, you can see Bitcoin tends to retrace ~30% or so during bull market rallies, indicating a $4,000 - $7,000 pullback is in store for Bitcoin in the shorter-term.
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.
About Us:
If you enjoy these posts, please support the channel by "Tipping" this post below, or using either of the referral links below.
They cost you nothing and give me a small reward, which makes me a little happier to share these personal analyses with you at no cost.
Buy Bitcoin here.
Earn Crypto here.
