Bitcoin went back and forth on Friday, oscillating between $22,500 and $23,000 for most of the day before closing almost unmoved but slightly positive on the daily candle. Though it was a quiet day, Bitcoin held on to the gains to print a fifth consecutive green candle concluding a fantastically bullish week in which BTC set a new ATH two days in a row as it looks to continue higher next week.
(December 18, 2020 7:30PM EST)
Though Friday's candle is a bit of a small Doji candle, indicating a potential reversal, I think that's not the case. Based on the chart above and the preceding price action, I think it was simply a quiet day with perhaps a bit of short-term profit-taking, but Bitcoin really didn't pull back much and is only about $1,000 off the current ATH just under $24,000.
Next week, I think Bitcoin could continue higher as BTC's got everything going for it and no major resistance points until probably $25K or maybe even $30K. In world news, it appears the US is close to potentially passing a second COVID stimulus bill which would continue a partial additional unemployment benefit and grant a reduced stimulus relief check for eligible people. In traditional markets, the US dollar is at a 2.5 year low and gold has recovered nicely from its drop to $1,750 and is now just below $1,900. This aligns well with Bitcoin's relationship with the two assets, so we'll continue to monitor them going forward for hints of Bitcoin's next direction.
Going forward, we've got a tremendous upward bias with a tidal wave of institutional money inflows coming on board by the day, retail sentiment turning bullish, a diminishing supply, and a massively inflating fiat currency pair. Fundamentally, Bitcoin is a strong buy and hold in the medium-long term. Short-term, you're chasing the trade here. Objectively, it might be best to wait for a pullback and buy value - easier said than done during a strong, record-shattering rally and FOMO surging all around. Patience will be key here - we know the trend of this market - it's convincingly bullish from here on - it's now a matter of adding to your position with a smart entry. We had 3 years to buy between $3,200 and $10,000, now anyone who wants to buy Bitcoin is paying a premium for lower risk.
Support: From here I think $18K should be support as it has a couple of times over the past month, but more importantly will be if this impulsive rally continues on, in which case a pullback to the former resistance level -- $20K -- would step in as a new support level. What a tremendous turn of events. If that's the case, then BTC is ready for another wave higher and puts in a major higher low on the longer-term charts.
Resistance: We're in uncharted waters here, but I think now that BTC is well into the five figures, it'll move in either $2,000 or $5,000 increments. Accordingly, my target is $25,000 which is a nice large, round psychological number, or possibly $30,000. From there, we'll look for exhaustive candles indicating Bitcoin is running out of steam and then look for support levels to target for dips to buy. Bitcoin's going higher - no sense in trying to fight this trend.
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