Bitcoin rallied on Monday, ending the day on a very bullish note. This weekend also saw bullish price movement in Bitcoin markets, but you always have to take weekend price movement with a grain of salt as trading markets typically have low volume and are subject to manipulation much easier. If this rally is for real, look out. Once Bitcoin gets going, it can be face-melting, even for those already onboard.
(October 12, 2020 8:30 PM EST)
Outlook: The fact that Bitcoin broke out on Friday, carried that throughout this weekend, and rallied impulsively on Monday is very bullish for Bitcoin after a long 2+ month consolidation. We may be ready to retest previous resistance now at the $12,000 - $12,500 level. It's worth noting that equities and gold have been going parabolic as of late in response to renewed stimulus deal talks, which should be short-lived, however this has been crushing the US Dollar, which as we mentioned last week is typically inversely correlated to gold and Bitcoin. Keep an eye on that situation, as the DXY may show you when Bitcoin is overbought or oversold. Until then, I'm a buyer on dips in Bitcoin, and typically the longer a consolidation, the more violent the breakout. We could just be getting going here, especially as volatility is high and there is a ton of uncertainty in all economic and political markets over the next month plus.
Support: $10,000 has been ironclad support, and higher yet there should be support between the 50 Day EMA around $10,750 and $11,000, both of which were highly contentious price levels dating back to the summer. Whenever resistance levels are defeated, they usually become new support levels. If BTC falls below $10,000, which I don't think is likely nor would it be for more than a few hours at most, look for support at the 200 Day EMA around $9,660 and then $9,000.
Resistance: This price action looks nothing short of bullish, and only a black swan event could really take the air out of Bitcoin's sails right now. Next resistance would be the August highs around $12,000 - $12,500 which I expect Bitcoin to attack relatively soon. If there's wind behind BTC's sails, $14,000, would be the subsequent target, then we can start talking about $20,000 again.
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