Outlook: Bitcoin exploded higher again during the week ending December 27th, breaking out to the upside and reaching above the $28K level before finding some resistance, pulling back to end the week around $26,500 with a long wick on the upside. This is a bullish candle of course as Bitcoin smashed through resistance at $25K, though it looks like it may find some resistance closer to the $30K level as BTC got stiffly rejected by $28K today.
(December 27, 2020 7:30PM EST)
Bitcoin broke out again, rallying above a potential resistance level around the 127.2% Fibonacci extension level and $25K which is a large, round psychological number to rally to a $500 billion market cap for the first time in its history. Bitcoin is now dead-center in between $25K and $30K, and after this week's bullishness, I think Bitcoin may make a run to $30K before finding any meaningful selling. BTC is overextended by technical indicators but fundamentally there's huge bullish pressure underneath to support it. Even if traders take some short-term profits, it won't be to enter large short positions here, it'll be to take some profit off the table and to rebuy lower. Pretty much any and all doubters of Bitcoin have been crushed by now, as margin calls are only pouring gasoline onto the long-trade orderbooks that are ever-growing. I think $30K is our short-term target which might then lead to a pullback. I'm not a guesser nor a bettor on a pullback, though I will look for signs of a topping pattern or selloff to then calculate how deep of a retracement may be, at which point I'll be a buyer on dips. This market is only tradable to the upside for now, and probably for the foreseeable future.
Demand is high and only increasing, supply is fixed, limiting, and decreasing, and fiat currencies like the US dollar and Euro are being massively inflated. These three variables provide and extremely bullish macro economic environment for cryptos like BTC, all of which support more buying, less selling, and higher valuations for BTC going forward. I'm bullish, if that's not clear.
Support: I'm looking for $20K to prove a higher low and new support having recently broken above the all-important historic previous level and ATH. Below that, support will most likely be between $16K - $18K, though I think pullbacks in Bitcoin going forward will likely be a little more shallow than they have been in the past, at least for the foreseeable future.
Resistance: I see near-term resistance around the $30,000 if Bitcoin pushes up higher from here. Above that, look for resistance every $5,000 up to $50K.
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