Bitcoin was quiet Tuesday, initially falling beneath the $10,500 level before catching a bid and recovering above $10,500 to form a small hammer and end the day positive.
(September 22, 2020 8:30 PM EST)
Resistance: In the short-term, resistance is at the 50 Day EMA around $10,700, $11,000, and then $12,000. Bitcoin has been bouncing around in this $1,000 range between $10,000 and $11,000 for a few weeks now. If I had any guess as to where Bitcoin is going based on recent market direction and price action, it would be down. Where? That's the multi-million dollar question.
Support: Look for support at $10,000, which is a huge psychological level. Next would be the 200 Day EMA around $9,489. After that, look for longer term support on the Weekly chart, which are my lines in the sand.
Outlook: Bitcoin is in a bit of a short-term downtrend right now, and probably fits into a descending channel right now too. While I don't think this is a major concern, it's worth monitoring support levels to see how deep of a retracement BTC might make. In other news, equities and gold also saw quiet days, not really breaking either direction but still looking very weak on the charts. If equities and gold continue selling off, which I expect they will over the next few days, Bitcoin may suffer some collateral pain as well. The bright side, though, is that despite this recent downward pressure, BTC has held up well compared to traditional assets. If there is another extreme March-esque selloff before the US election, I expect BTC to lose the least % in price, and small cap equities to suffer the largest drawdown.
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