Bitcoin pulled back a bit on Friday, initially falling to about the $12,700 level before turning around, closing the day just under $13,000. This is probably some profit-taking as Bitcoin went straight up this week into possibly the last major resistance level before the all-time high.
(October 23, 2020 8:00 PM EST)
Outlook: Today's red day doesn't phase me whatsoever, I think Bitcoin just needs to cool off for a moment as longs delever a bit and BTC digests the gains. I wouldn't be surprised to see this week's breakout continue to higher levels next week, as Bitcoin tends to overextend on rallies and selloffs, and based on the long 2+ month consolidation period Bitcoin experienced this summer of minimal sideways trading, that usually builds up to larger, more pronounced moves, the likes of which I believe we have yet to see. Next week, I think we might see some more chop, but based on the way equities and gold have been resilient and the US Dollar continues to drift lower, I think Bitcoin's got more wind at its tail than its head.
Support: If Bitcoin were to pullback further, look for support at the 50 Day EMA and $11,000 which is former resistance. Below that, which I think we probably don't see anytime soon unless there's a major shock to the global economy or COVID spike again, $10,000 should be a huge support level, which is also now buoyed further with the rising 200 Day EMA just below. I don't quite consider $10,000 to be my line in the sand quite yet, but I do view it as the single strongest near-term support level of Bitcoin.
Resistance: $13,000 or possibly $14,000 is probably the last "major" resistance level between Bitcoin and the ATH's again. That being said, I don't think this is a particularly significant level, and given the recent array of tailwinds to BTC's bull case, I wouldn't be surprised to see that level crested sooner rather than later. Maybe Bitcoin pulls back a bit, buyers step in to buy the dip, and Bitcoin resumes its upward trajectory into the five-figures.
About Us:
If you enjoy these posts, please support the channel by "Tipping" this post below, or using either of the referral links below.
They cost you nothing and give me a small reward, which makes me a little happier to share these personal analyses with you at no cost.
