Bitcoin continued its breakout during the week ending November 1st, eclipsing the $13,000 level and reaching up towards the $14,000 level, closing the week just under that level. Bitcoin is in a well-defined uptrend and momentum is to the upside.
(November 1, 2020 8:00 PM EST)
Outlook: Bitcoin continued its breakout higher, bypassing the $13,000 level and reaching up to the July 2019 highs around $14,000. I feel like I've been saying this for a while; this is probably Bitcoin's last 'major' resistance level before the sellers give in and the drawbridge to the previous ATH lowers. There is simply nothing bearish about Bitcoin right now. The latest PayPal, Square, and MicroStrategy news is only the beginning of a larger sector trend where companies will add Bitcoin to their balance sheets in order to hedge company reserves against inflation (and make profits if they so choose). Looking ahead, the chart below shows a rough estimation of a 5-wave cycle, with Bitcoin currently being in a Wave 3. The Wave 3 target is almost definitely conservative, however I think Bitcoin will probably face some major resistance at $20,000 and experience some profit-taking and 2017 peak-buyers exiting long-stranded positions at breakeven. A pullback thereafter to $12,000-$14,000 probably makes sense before making a successful reattempt at eclipsing $20,000.
Support: Look for support between the $11,000 and $12,000 level, which is former resistance and a range where Bitcoin spent three months earlier this year in a sideways consolidation pattern to build up for this most recent move higher. I'm looking to add on pullbacks, specifically as low as the $11,000's where I think the buyers will step in and breathe life into Bitcoin. There is support at $12,000, $11,000, $10,000- which is a large, round psychological number and the 50 Week EMA, and long-term support at the 200 Week EMA at $7,000.
Resistance: Bitcoin broke through $13,000 which was thought to possibly be a resistive level, only to then continue right on up to $14,000 which is in fact the 2019 highs. If Bitcoin can break above $14,000, I think $15,000 is next and a pretty clear path to $20,000. It's not worth that Bitcoin is a bit extended on the intra- and short-term charts, and is trading near the top of the ascending channel, indicating more confluence of resistance in this area.
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