Bitcoin Weekly Price Forecast (9/6/20) - Support at $11,000 Held. Now What?

By Crypto Daily FX | Crypto Daily FX | 1 Sep 2020


Bitcoin initially dropped last week, testing the $11,000 level before eventually turning around and bouncing back up to around ~$11,600. This is a neutral to slightly bearish candlestick, as Bitcoin fell, bounced, and eventually closed slightly lower than last week's Weekly candle. 

(Aug 31, 2020 8:00 PM EST)

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Bitcoin continued its consolidation pattern during the week ending August 30th, pulling back to test support around $11,000 before reaching back higher again. Two red candles on the Weekly chart are not a great look, but they are not particularly threatening, as Bitcoin needs to digest its gains before moving higher if any of us want this next Bitcoin bull market to be healthy and sustainable. As far as I'm concerned, this is a healthy looking uptrend with normal pullbacks with previous resistance levels becoming new support levels, which is bullish and validates the bull market. If Bitcoin falls below the $11,000 level, look for massive support between there and the $10,000 level, where I expect a ton of buyers to step in. 

Bitcoin is currently trading above the 50 and 200 Week EMA's, which should act as significant long-term support below at ~$9,133 and $6,645, respectively. If Bitcoin were to fall off a cliff and somehow drop below the $10,000 level, where there is massive support and the 50 Week EMA at ~$9,100, look for buyers to step in around the 200 Week EMA around $6,600. If Bitcoin falls below that, the new Bitcoin uptrend is in jeopardy. 

My personal educated view, based on the underlying bullish fundamentals and supportive price action above and on the daily chart, is that Bitcoin is going to consolidate the most recent gains and higher high, as it did for 3 months from May - July this year. Markets need buyers and price discovery, and as governments continue to recklessly print billions of fiat without recourse, Bitcoin's Stock to Flow ratio overshadows gold, and new investors buy their first (or more) Bitcoin every day, Bitcoin's outlook has never looked stronger. While it remains to be seen whether Bitcoin's price can soar as high as six figures, it seems everything is aligning for Bitcoin's market cap to be in the trillions, not billions.

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 ironclad 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.

Interestingly enough, as we watched equities fall today, Bitcoin and Ethereum rallied, continuing to show their divergence and non-correlation. It's worth noting that the majority of capital flowing into the equities markets is 1) IRA/401k automatic contributions, and 2) Federal Reserve money printing. The majority of investors are moving to cash or reallocating to other/safer asset classes at lower valuations, such as Bitcoin.

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