Bitcoin Daily Price Forecast (8/20/20) - $12,000 Support Broken: How Low Will Bitcoin Fall?

By Crypto Daily FX | Crypto Daily FX | 20 Aug 2020


Bitcoin fell again on Wednesday, breaking through the $12,000 level and eventually settling around $11,700 USD. Two red candles in a row is bearish without a doubt, but we see this as a short term consolidation after a 35%+ rally over the past 4 weeks. 

(Aug 19, 2020 8:00 PM EST)

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After breaking through the $12,000 level for a couple days, Bitcoin was unable to hold $12,000 as support and fell back beneath it, reaching back down towards the $11,500 level. This is not a cause for concern, as markets cannot keep going up indefinitely; even 2017/2018 showed that won't last long. Frankly, these shorts of moves; higher highs followed by consolidation and repeat seem much more indicative of a healthy, normally functioning market, at least from a technical standpoint. If BTC can break above $12,000 once again, it should set its sights on the $14,000 level. 

The current short-term trend is down, but look for support around $11,000, the 50 Day EMA at ~$10,500, and of course the $10,000 level underneath should offer significant support and areas where a lot of buyers will be ready to step in and buy Bitcoin at a discount. Lower, there is a confluence of longer-term support around the $9,000 level, with the 200 Day EMA around ~$9,100, as well as the 50 Week EMA around $8,930. This is a conservative entry point that should attract a lot of buyers, especially those who are looking for a lower-risk entry (Hedge Funds, High Net Worth Individuals, Family Offices, University Endowments, etc.).

Ultimately, this market is going higher and remains on a buy-the-dip scenario until the trend changes, which I don't foresee happening for at least a couple years, possibly longer. In the meantime, we'll closely monitor the daily chart and look for any indications of major trend changes or affirmations of the current trend. For now, dollar cost averaging (DCA) and waiting to buy closer to support would be advantageous until we get a clearer picture.

 

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