Bitcoin broke out during the week ending November 8th, breaking through resistance at $14,000 and shooting up to the $16,000 level before finding resistance, closing the week close to the highs. Bitcoin is obviously in an impulsive uptrend, reaching price levels it hasn't seen since December of 2017.
(November 8, 2020 8:00 PM EST)
Outlook: Bitcoin continues to rally higher, breaking through what many thought was possibly the last major resistance level around $13,000 - $14,000 before its ascent to the previous ATH at $20,000. Bitcoin wasted no time, spending no more than a few days between that range before impulsively breaking higher, even cruising past $15,000 and swatting at $16,000 before turning down a hair. I think Bitcoin is on a trajectory to attack the 2017 ATH in the next few weeks before pulling back and digesting the gains before making another run higher to new all-time highs.
In legacy markets, the 10 year yield curve and bonds term premiums are indicating a possible local top in equities forming, and in the midst of a seasonal liquidity drought, contested US Presidential Election and COVID second wave forcing economies to shut down all over the world, there is a strong potential for another selling event over the next 4-6 weeks as Trump goes to the Supreme Court to overrule the election, all the meanwhile a second COVID stimulus package remains out of grasp for tens of millions of Americans in financial dire straits. Expect more volatility, which may give Bitcoin one final dip to buy in late November/early December before heading higher into uncharted territory we've all been projecting for years now.
Support: Look for support between the $13,000 and $14,000 level, which is former resistance, recently to a minor degree and the 2019 highs. Given how extended this current move is and the multiple resistance levels Bitcoin has broken through, it's hard to say how deep Bitcoin might retrace before continuing this trend higher, assuming it has no gas left in the tank to continue this current move, which it very well may. I think $13,000 is a logical level, with the next level of support being between $11,000 - $12,000, which is the top of the sideways channel Bitcoin oscillated within for a couple months this summer before initiating this move up. $10,000 is my ironclad support, which is further supported by the 50 Week EMA around $10,200 and the 200 Day EMA. That being said, I don't think we'll even get a chance to buy at those levels again, possibly ever.
Resistance: Bitcoin broke through $14,000 which was my notated final major resistance level before continuing onto the ATH at $20,000. Now that that has been overtaken as well as $15,000, which would have been my subsequent resistance level given the large round psychological number, I don't see much selling between here and $19,000 or so. However, I think $20,000 will present massive resistive pressure, mostly from short-term traders, Elliott Wave Traders looking to take profits from this probably Wave 3 move in order to reload on a Wave 4 pullback, or the few remaining retail traders who got sucked in at the top of the 2017 crypto bull market hype, although I'm confident probably 80% of them have capitulated long ago - not that they were a significant source of liquidity in this market anyway.
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.
