Bitcoin rallied a bit on Wednesday, breaking above the $14,000 level and reaching as high as the $14,300 level before pulling back, settling around $14,100. Bitcoin experienced quite a bit of price movement on Wednesday, swinging in a nearly $1,000 range, ultimately forming a long-wicked bullish candle.
(November 4, 2020 7:00 PM EST)
Outlook: Bitcoin is on the move again, breaching the $14,000 as US election results come in favoring Democratic Joe Biden and legacy markets are reacting positively because of it. The proposed Democratic stimulus package and liberal propensity for continued QE and bailouts for businesses has been bullish for equities and commodities alike, as their valuations have appreciated alongside high monetary supply. It's also worth noting that Ethereum 2.0's deposit contract got launched today, as confirmed by ETH Founder Vitalik Buterin on Twitter, which sparked a run-up in price in ETH which likely was the reason BTC caught such a flurry of a bid at the same time as well. This market is relentless in its run-up, pressing $14,000 as resistance on its heels. While BTC is a bit extended, there are certainly enough factors to support a continued rise from here.
Support: I think it makes a lot of sense that Bitcoin pulls back to previous resistance around the $12,000 level, dipping possibly as low as the $11,000s. That would make for a clean test of new support/former resistance and a healthy reset before resuming the uptrend to higher highs in Q4. However it's possible we don't even get that low, as $13,000 may serve as support now given how bullish and supportive this market has been of late and going forward. Areas of note are $12,000, the 50 Day EMA around $11,800, $11,000, and $10,000 which is major psychological support, and around the 200 Day EMA.
Resistance: $14,000 is resistance but under heavy fire, as I need to see an impulsive candle break above $14,000, close above it, pull back, and bounce off it as support. After that, I'm looking for $15,000 and then $20,000. The sky is the limit for Bitcoin; the fundamentals are just too bullish and the supply is so limited, and the macro environment is screaming to buy any fixed or limited supply asset like Bitcoin as we near a President who will finally decide on a new stimulus package thanks to the Federal Reserve's money printer.
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