Bitcoin exploded higher on Thursday, breaking out above the $15,000 level and closing the day near the highs. This is obviously extremely bullish as Bitcoin has defied any means of resistance lately and is rapidly pointing towards the ATHs at $20,000.
(November 5, 2020 7:00 PM EST)
Outlook: Bitcoin broke out to the upside yet again, cruising right past $14,000 and up above the $15,000 level, reaching its highest price level since January 2018. Bitcoin is on an absolute tear, crushing resistance point after resistance point with no real reason to pullback other than shorter-term traders taking profits. At this point, BTC is a bit overbought but is well within the ranges of a medium-term breakout after consolidating in the $10,000 - $12,000 range earlier this year. This type of sideways trading leads to a significant breakout in either direction, this time breaking up. I do think BTC probably pulls back a bit soon, as Bitcoin hasn't had a meaningful pullback frankly since mid-September.
In legacy markets, equities and gold have had a roaring past couple days in response to the ongoing US Presidential Election count which heavily favors Democrat Joe Biden to win at this point unless incumbent Donald Trump can get a major underdog win in the Supreme Court, which I deem unlikely but still possibly. Wall Street is pricing in higher inflation and higher stimulus which supports higher equities prices and lower US Dollar prices, which has bode well for BTC as you can see in the chart above.
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. $10,000 is my floor, which I'm not sure Bitcoin ever sees again in its lifetime; but let's see how the next month or so plays out.
Resistance: With $14,000 crossed and now $15,000, there isn't much standing between Bitcoin and the December 2017 ATH's at $20,000. If there's no pullback soon, I think we could see a pretty straight shot to $20k. I think we probably see a pullback first, but Bitcoin has a funny way of making investors look silly and doing the unexpected.
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