Bitcoin initially pulled back, rallied, and ultimately settled in the green on Sunday, August 16th for a fourth second green candle. Bitcoin continues to grind higher after exploding through the $10,000 level at the end of July. This is, of course, a bullish development and positive trend, and given the current monetary policy in the US and EU and macro overview, commodities and assets with fixed supplies should continue to do very well over the medium-term. Remember, we are in a new reality with unlimited Federal Reserve Quantitative Easing and inflation, and there will never be more than 21 million Bitcoin in existence.
(Aug 17, 2020 2:30 PM EST)
Bitcoin is currently trading above the 50 and 200 Week EMA's, which should act as long-term support below at ~$9,000 and $6,500 respectively. If there Bitcoin were to crash and fall below the 50 Week EMA at $9,000, look for buyers to step in around the 200 Week EMA around $6,500. If Bitcoin falls below that, the new Bitcoin uptrend is in jeopardy. We suspect this is only possible with a significant liquidity event, such as another COVID-related March-caliber sell-off; even then, we see such an event as short-term weakness and a medium-long term accumulation zone.
Looking ahead, this is a buy on the dips scenario, with longer-term investors looking to add on pullbacks, particularly the $10,000 and ultimately $9,000 levels below, which should be ironclad support. Next immediate resistance overhead is the July 2019 highs around $14,000. If Bitcoin can break above that - which may not be easy - there should not be many sellers between there are 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.
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