Hi everyone,
The last couple of weeks has seen some bearish news. United States president Donald Trump has COVID-19 (true or false is for another debate) and this brings a lot of uncertainty and doubt in the stock markets. The CFTC are targeting BITMEX (finally if you ask me !) and KUCOIN got hacked. All bearish news, but what is Bitcoin doing ? Bitcoin went from 10.9K towards 10.5K. This is really nothing special and shows a lot of resilience. For me this is a good sign and could well confirm that we are in a bull market. In bear markets, this kind of news would have dropped the Bitcoin price a lot more than just 3 to 4%. In bull markets however, this kind of news does not really effect price negatively anymore.
That BitMex gets targeted by the CFTC is about time for me. I know that we are in a free market and we should embrace a form of decentralization, but when an exchange is deliberately trading against its customers, I feel it is only fair to bring them to justice. The CFTC is charging them for all kinds of reasons, but for me the biggest points is the trading against its customers. They have made millions if not billions of all the fees they have raked in by liquidating customers. This is simply not fair and should get punished. Furthermore leverage is very risky and maybe it would be a good idea to bring a form of caution in leverage trading. Exchanges should not be allowed to let you trade for a 100x leverage in my opinion. It is a pure gambling/casino environment and you know that the house will always win at the end. Maybe it would be good to regulate derivative and leverage exchanges towards a maximum of 5x or 10x leverage. This would maybe give less volatility, but at the same time Bitcoin and Altcoins would grow more natural.
KuCoin got hacked (like a lot of other exchanges in the past) and shows once again that you should store your longer term holds on other wallets (hot or cold wallets), rather than to keep them in the exchanges. If you purely trade short term, it is better to keep them on the exchange, but all the rest is really better to put them somewhere else. It may be a little hassle, but believe me you will feel safer and reassured after.
Now lets go over to Bitcoin. The monthly chart closed good in my opinion (closed above 10.593$, like I stated in my previous post would be bullish) and signals a test towards at least 12K again in October. Obviously there is caution applied, because of all the news we had in the recent weeks. President Trump having COVID-19 is not helping the stock markets at all and brings a lot of fear and uncertainty. It is well possible we see another good drop in these markets and this would most likely bring Bitcoin and the Altcoins down as well unfortunately (short-term).
However if we do not see a big drop in the stock markets (kind of like March 2020, but on a smaller scale), I really think Bitcoin can retest 12K and if it breaks above it we can target 14k/17k !
A lot of people are bearish right now and I see a lot of targets flying around Twitter of around 9K, 8K and even lower. The more people are bearish, the better it is. The fear and greed index is around 42 which is slight fear. Going against the herd has often proven to give good results, so be aware if a lot of people are bearish.
Weekly Bitcoin
Here is a weekly chart of Bitcoin :
I have drawn 2 orange arrows to show OBV moving up during a certain length of time and price actually being down compared to that. This is bullish longer-term. When we look at shorter-term moment, OBV and price are kind of agreeing with each other. This means that price is where it should be looking at a month/two months area.
When we look at RSI I have drawn a blue horizontal line. You can always check and move the chart further to the left yourself, but this line has been very important during the history of Bitcoin. It has been touched a lot of times during support and resistance. Right now we are hitting it as support and hopefully we can get a bounce off of it. It is in confluence with the 21 EMA showing support and it being close to the yellow trend line I have drawn in the price chart. In my opinion it will be decision time soon for Bitcoin ! Breaking it and we will see a prolonged range of under 10K and holding it as support will most likely create a good bounce to at least 12K, which is one of the more important resistances of Bitcoin to break through. I am leaning more towards a bounce and moving upwards and this has to do with the on-chain analysis (Willy Woo is great for this) and some other reasons like OBV, general sentiment, etc.
Bitcoin daily chart
This is a daily chart and I will keep it short. I have put the Bollinger Bands (BB) indicator (the blue lines with the red line in the middle) and the Commodity Channel Index (CCI, seen under the price chart). The BB’s are squeezing at the moment and squeezing means a bigger move would be coming up. It can still squeeze more, like we can see towards the left, but squeezing the price in general means a good price move is coming soon. It seems possible we will see it already next week. I have drawn orange lines as a form of channel. It seems likely we are going to move upwards and that price would hit both the orange top trend line and the upper blue line of the BB (confluence). This would mean once again around 11K/11.1K. If we move downwards, it means we will break the orange trend channel and we could once again test the 10K/9800$ area.
The CCI shows that there is decent room to move upwards and got close to being oversold twice in the recent weeks. You can often see a clear pattern. When it goes above the dotted upper line, we move towards overbought and a move downwards in price is likely and vice versa. This is a handy tool for trading.
Moving downwards in price, breaking the orange trend channel, would mean an oversold CCI and it would likely mean we will once again get support around the 10K/9800$ area.
Conclusion
After quite some bearish news we see Bitcoin holding strong and this is a good sign in my opinion. A lot of people are bearish right now and it is good to be cautious. However price often goes against the herd, so it could well mean we will see upside in the coming weeks. The monthly close has been good for me and the weekly chart is close to support at the moment. A bounce upwards is a good possibility while looking at this and other reasons like on-chain analysis being bullish.
Targets to look for short-term are the 11K area and the 10K/9800$ area. Looking forwards in the weeks to come I believe we can look at the 12K resistance area and a downwards target could be around the 9.5/9.3K area.
12K is a key area for longer sustained upside movement towards 14K/17K if we break it and hold it as support. I would love to see us battling the 12K area for a couple of weeks (just under it, having it as resistance), before really breaking above it. It is hard to put a timeline on this, but it would mean we battle the 12K area in October and we would break it towards November/December.
This is not financial advise and I am not a financial advisor. Please do your own research and make your own decisions.
