Bitcoin rallied again on Wednesday, reaching up towards $16,000 again before closing the daily candle near the highs. This looks like Bitcoin is ready to continue testing resistance at $16,000 above, as it certainly has enough buyers and momentum compared to a few months ago.
(November 11, 2020 8:00 PM EST)
Outlook: Bitcoin found continued buying pressure on Wednesday, turning around and rallying towards the $16,000 level again, showing resilient bullish pressure. Bitcoin is a bit overextended as it has not really corrected much since taking off on this rally in September, increasing roughly 75% in a span of only a little more than a month. If Bitcoin breaks above $16,000, look for another $1,000 range with $20,000 being zeroed in on. If Bitcoin gets rejected by $16,000 again, look for a consolidation-esque pullback to the most recent penetrated resistance level, somewhere between $13,000 - $14,000 is probably the most obvious near-term target. After Bitcoin regains its footing, I expect it to again continue upwards toward $20,000 again.
In the legacy markets, Bitcoin's traditional inflation hedge gold has been particularly weak lately, selling off $70+ the other day and today trading well below the $1,900 level as it looks to be pressured down further toward the $1,850/$1,800 level. The DXY continues to show resilience and bounce back off recent support levels, and is further supported by seasonal strength in the US Dollar, as are equities. Look for the DXY's price action to determine how Bitcoin may react next. If we see bullish action in the DXY, it may be a good indication that Bitcoin is likely to face some downward pressure, at least for now.
Support: Look for support between $13,000 - $14,000. Below that, added support around $12,000, $11,000 and ultimately $10,000. The lower Bitcoin goes, the higher the chance of a violent bounce. I don't anticipate very deep retracements here; in fact I'll be looking to DCA in any and all pullbacks.
Resistance: $16,000 is near-term resistance for Bitcoin. If Bitcoin breaks above there, there's a pretty open field until $20,000 with no psychological barriers or significant Fibonacci price levels. I expect fortuitous resistance at $20,000 which probably causes a couple of rejections. Once it gives way, next target is $25,000 and then $30,000.
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