Bitcoin went back and forth on Friday, initially falling to the $16,000 level before bouncing up to $16,500 before finally pulling back to finish the day almost flat. This pattern is starting to look a little exhausted, and given the face-melting rally Bitcoin has had over the last 8 weeks, this chart is starting to show exhausted buying and that a pullback soon is starting to look like the path of least resistance.
(November 13, 2020 7:30 PM EST)
Outlook: Bitcoin went up and down on Friday, closing the day nearly flat and closing the week in an exhaustive-looking formation over the last week. It doesn't take a genius to see Bitcoin has gone pretty much straight up since the end of September with almost no recourse, barely pulling back before continuing up within 48 hours to new yearly high after high. At this point, I think the buyers are a bit exhausted, and while I don't think there's a huge army of short-sellers in this market -- I certainly am not -- I think at these levels, the path of least resistance for Bitcoin is down in the short-term. With that being said, I think a pullback is a good buying opportunity, as my modus operandi with Bitcoin is to accumulate, so I'm looking to buy value in a bull market, not get lucky fading exhaustive rallies that may be pretty shallow, as they have shown to be in the past.
Support: Look for support around $14,000, or frankly even $13,000 would be value at this point. 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. $16,000 has shown to be contentious at this point, with Bitcoin failing to break impulsively above it, chopping around that area for a few days now. If Bitcoin breaks above there, there's a pretty open field until $20,000 with no psychological barriers or significant Fibonacci price levels.
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