Bitcoin rallied during the week ending October 11th, grinding higher during the week before making a weekend leap above the $11,000 level. This is a bullish development for sure, as this points to a bullish resolution of the 2+ month long triangle consolidation pattern.
(October 11, 2020 8:30 PM EST)
Support: Bitcoin remains trading above the 50 and 200 Week EMA's, which should act as significant long-term support below at ~$9,461 and $6,877, respectively. If Bitcoin were to suffer a large sell off and drop below the $10,000 level, look for deeper wallets to step in to buy around the 50 Week EMA and then finally the 200 Week EMA. If Bitcoin falls below that, the uptrend is in question.
Resistance: Looking ahead, Bitcoin is a buy on the dips scenario, with medium- and longer-term investors looking to add on pullbacks, particularly the $10,000 and ultimately $9,000 levels below, which should be strong support. Next immediate resistance overhead is the July 2019 highs around $14,000. The good news is that $14,000 is probably the last stop before Bitcoin runs up to new all-time highs around $20,000, as there should not be many sellers between $14,000 and the previous all-time highs around $20,000 US. Longer-term, the sky is the limit for BTC, especially if the Lightning Network Upgrade is implemented in the next 12 months to accommodate new money entering the market and mitigating high transaction fees. One positive note is that once Bitcoins breaks $12,000 and then $20,000, it should be a quick run up to $30,000 or $40,000, as there will be little selling resistance. In fact, there might be a surprising amount of buy orders set around the $50,000 level as it is only around that price valuation and market cap that institutions will view Bitcoin as an asset class with sufficient liquidity to dabble with.
Outlook: The more you zoom out on a Bitcoin chart, the more bullish it looks. The recent price action, especially on the Weekly chart, shows higher highs and higher lows. If during this week Bitcoin can close higher, or even close relatively flat without pulling back in a significant way, holding onto these gains could be enough to ignite the next wave of buying and Elliott Wave continuation up in this uptrend. At this time, the uptrend is alive and well. With equities and gold rallying strongly lately, this could help boost BTC prices as well. Everything is shaping up nicely for a powerful medium-long term bull run for Bitcoin. Look for our Daily Forecast tomorrow, as we are in peak volatility seasonality, and increasing uncertainty in markets surrounding the US election, another COVID stimulus package, and more.
About Us:
I take time out of my day to share these with the community completely free. If you enjoy these posts, please support the channel by "Tipping" this post below, or using either of these referral links below. They cost you nothing and give me a small reward, which makes me a little happier to share these personal analyses with you at no cost.
