Bitcoin sold off again on Wednesday, breaking through the $10,500 level and drifting lower towards $10,000, closing at around ~$10,100. Volatility is back; investors are exiting positions in all markets and raising cash. Bitcoin is no exception.0
(September 23, 2020 7:30 PM EST)
Support: Now that the 50 Day EMA is gone, look for support at $10,000, which is a huge psychological level. Next would be the 200 Day EMA around $9,494. Sometimes it helps to zoom out and look at fibonacci retracements and see where they align with other support levels. These tend to be stronger lines of support, such as in the low $9,000s around the 200 Day EMA and 38.2% Fib.
Resistance: I50 Day EMA is immediate resistance- and now declining. If BTC breaks above that, look for strong confirmation - a close above that level - before we even consider talking about $11,000 and above. Bitcoin has been bouncing around in this $1,000 range between $10,000 and $11,000 for a few weeks now. Based on where markets have been trending, Bitcoin is probably going to retest $10,000; well, tonight. Frankly, it looks like $10,000 may not hold as support, at least for now, while the overall trend in most markets is down.
Outlook: Markets continued to sell off today, equities putting in lower lows, especially Small Caps, Gold, and Silver, among others. Look for this pain to continue as investors take profits and move into cash as COVID second waves start to become a conversation piece and the US election only weeks away. Historically, this is a negative time of year in markets, and Bitcoin is no exception - although it may not fall quite as hard as other assets. It may be best to stay on the sideline with cash for now and place small buy orders at strategic support levels underneath. The medium-long term hasn't changed, but we don't want to catch a falling knife if we don't have to.
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