Bitcoin had a quiet day on Thursday, initially pulling back a bit before turning around and rallying to just above breakeven to end the day with a marginal positive candle. This is a pretty neutral candle as we go into a long holiday weekend with thin markets. If anything, this opens up some opportunity for some weekend manipulation during low liquidity trading. I think Bitcoin has room to pull back here and make an actual correction as it did about a month ago during Thanksgiving, however, I'm not willing to sell under any conditions for a long while.
(December 24, 2020 7:30PM EST)
Bitcoin has been quiet and relatively sideways for about a week now, indicating a period of consolidation which, after a rally, usually points to a short-term pullback. I think this is progressing wonderfully to result in a short-medium term pullback to end the year or in Q1 for a final macro dip before heading off to higher ATHs. As far as pullbacks go, $20K is the immediate downside target followed by somewhere between $17K - $18K. With the rising 50 Day EMA now above $18K, the 38.2% Fibonacci retracement at $18,762 might make a lot of sense as a final wick down under $20K before bouncing. We're in a bit of a sideways trading range now here between $22K - $24K, so we're in a wait and see mode with Bitcoin with a slight short-term downward tilt. However, that doesn't negate the fact that we are medium-long term bullish and are buyers on dips.
For now, I think BTC probably finds resistance around $25K or maybe $30K if it really gets going in the short-term. We are a bit overextended but there's simply too much demand and supply constraints to justify a major price correction less a black swan. The risk here is not buying too high - it's selling too low or worse: shorting, which will inevitably nuke anyone's account.
Support: Look for support at the $20K level which is resistance turned support and a large, round psychological number. I think there is and will be FOMO to buy BTC under $20K (can you believe we're saying this already?), so I think a dip to $17K - $18K will quickly be bought up, which lines up with the 61.8% or 78.6% Fibonacci retracement levels.
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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