Bitcoin fell on Friday, initially testing the $11,500 level before selling off to end the day in a pretty bearish candle. That's not to say this means the short-term uptrend is dead and in the grave, but this shows it would be prudent to monitor support levels as selling off into the weekend is usually not a good sign in any market.
(October 16, 2020 8:00 PM EST)
Outlook: Bitcoin dropped on Friday, erasing yesterday's gains and going into the weekend with a slightly negative bias. This goes for all markets, as equities and gold both sold off into Friday's close as well. This could signal a volatile next couple weeks as we are now less than 3 weeks from the US Presidential Election, and COVID cases spiking in certain cities around the world, I expect to see a lot of volatility in the near future. Of course, there could be huge spikes up; that is what volatility is; big swings in both directions. However, expected volatility and uncertainty in markets usually leads to assets reverting to the mean (overextended equities), and investors taking risk-off bets, taking profits and moving into cash and bonds. This could lead to equities/gold weakness and US Dollar strength, which, as we have explained in previous articles, BTC tends to move opposite the US Dollar and closely with that of Gold. This is a situation we'll be watching closely, so make sure to follow us and look for daily market recaps and price forecasts as we look to navigate choppy waters ahead.
Support: Look for support below at the $11,000 level which is not much higher than the 50 Day EMA around $10,814. This area, formerly resistance, should act as new support for BTC. If not, then perhaps BTC isn't ready to make a move higher just yet, and we'll see BTC remain trading in a $1,000ish range until an impetus causes it to do so.
Resistance: I'm looking for an impulsive candle above $11,500 and then see what kind of selling BTC runs into around $12,000. After that, I don't see a ton of resistance between there and $20,000, so it might come quicker than most expect. Gold continues to shed off weakness; I expect BTC should parry any attempts even better.
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