Outlook: Bitcoin pulled back on Tuesday, initially falling down to near the $18,000 level before rebounding a bit, eventually settling the daily candle down on the day at roughly the $19,000 level. This is a bearish candle, as it indicates, of course, selling pressure, which can likely be attributed to volatility in equities markets as they drift lower, and heightened volatility around the time of the Ethereum 2.0 beacon chain launch. I still think Bitcoin is likely to get rejected by the $20,000 resistance level above, as Bitcoin a bit overextended after nearly doubling over the last couple months, even forming a marginal new ATH yesterday. Ultimately, we're going to need some juice to break through this level, and given the sweeping bullish sentiment right now, I think markets will do as they do best and move against the majority of investors, pulling back and digesting these recent outstanding gains.
Bitcoin appears to be chopping around in this region, as I have forecasted it would, so I anticipate further sideways action up at these levels for now. Seeing as how markets are not linear and don't move straight up or down, I think Bitcoin's exhausted vertical price action for some time and will probably drift lower in a sideways trading pattern. This is healthy and expected as Bitcoin needs to consolidate this rapid price discovery and allow weak hands to be shaken out by intraday volatility (or boredom). It is at the end of this projected consolidation pattern, which probably lasts well into Q1 2021, that I will be looking for a local bottom and a higher low, which could mark as potentially the last medium-long term dip to buy before launching off to new highs.
Support: $16,000, or the 38.2% Fibonacci retracement acted supportive over the weekend as Bitcoin sharply pulled back, so I think that's a safe level to target for a potential local bottom. If Bitcoin goes lower, I think it ultimately finds too much buying pressure around the 50% or 61.8% fib levels, $14,852 and $13,670 respectively.
Resistance: $20,000 remains firm resistance, which makes sense as it's the previous ATH. When BTC breaks above $20,000, which, may actually happen in shorter time than we had anticipated, I'll be looking for a quick run-up to $25,000 and then $30,000.
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