Bitcoin pulled back again on Friday, negating yesterday's gains and moving lower to test the $11,500 level. This is a small bearing engulfing candle and an overall bearish-looking short-term trend, so I would not be surprised if, over the next week or so, Bitcoin revisits support below.
(Aug 21, 2020 8:00 PM EST)
Bitcoin fell again on Friday, slowly fading lower from the $12,000 level a couple hundred dollars at a time, in what is most likely the exhausted buyers looking to take profits and sellers looking to sell a slightly overextended market. $12,000 appears to be acting as firm resistance, but from what the charts are telling us, this isn't a cause for the concern, as Bitcoin is still well within the definition of an uptrend and has made higher highs since March to prove it. For now, a pullback probably makes sense for a healthy Bitcoin market.
Interestingly enough, and we've mentioned this before: Bitcoin continues to trade almost in lockstep with gold (chart below), which makes sense as both assets serve as fixed-supply assets and monetary hedges against government quantitative easing and the current macro environment of endless money-printing. It makes sense that both assets fell over the past couple days, as the US Dollar conversely rallied after bouncing off a seasonal low. For the time being, it might make sense to sit back and let the markets tell us what they're going to do next and wait for a clearer picture. I'm still a buyer on dips and am looking to add closer to the 50 Day EMA around $10,500 and the 200 Day EMA around $9,150 below, although I suspect $10,000 should offer massive support and would treat anything below as a welcome discount.
Heading into the weekend, I would take any significant move with a grain of salt, as weekend trading volume is historically lower and markets are more susceptible to price manipulation. Nonetheless, a break above the $12,000 level is obviously bullish and would send BTC looking towards $13,000 and then $14,000.
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