Bitcoin had a volatile day, selling off early before finding support, bouncing up to new local highs just under the $17,000 level. Bitcoin continues to fend off sellers and extend its winning streak, which is starting to look a bit toppy.
Outlook: Bitcoin initially dipped on Monday but turned around to rally to new local highs to start the week. Nothing new to report here, except for the fact that as we rapidly approach a string confluence of bearish fundamental and technical variables in the legacy markets, newer/“surfeit” assets like Bitcoin will be the first to begin the selloff, leading equities, forex, and commodities as in situations look to trim existing profits and convert paper profits in riskier assets to cash during an expected period of market weakness. This lines up well with an overextended and overbought Bitcoin market that hasn’t seen much less than a steady stream of bullish days in 2+ months. A pullback here makes a lot of sense, and frankly, is a healthy maneuver. Despite short-term weakness ahead, I view that as a great opportunity to add more on value in advance of a massively bullish Q1 2021 rally that extends probably a few years to new highs.
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. On a late Nov/early Dec selloff, I’m looking to buy on a dip; the deeper the better, IMO — it won’t last long.
Resistance: $16,000 is near-term resistance for Bitcoin. $16,000 has shown to be vulnerable but contentious at this point, with Bitcoin failing to break impulsively above it, chopping around that area for a few days now. If Bitcoin breaks convincingly above there, there's a pretty open field until $20,000. After that, which won’t be easy, look for resistance every $5,000 increments.
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