BITCOIN AT $19000+, WHAT NEXT?
Three Probable Scenarios.
I am doing this review because of the numerous calls I have gotten in recent time. Calls like ‘ken, I heard Bitcoin is going up, should I buy?’ and calls like ‘Please I just bought Bitcoin and it is going down, should I cut my losses and sell?
Well, I can’t give a straight answer to these questions because I can’t claim that I know exactly what the market will do next since trading/investing is purely a game of probabilities.
But with technical analysis, We can predict a series of probable price movements based on clues from price history.
Bitcoin has had a ‘fantabulous’ year 2020. It moved from the Low of $3,750 in March to the High of $19,400 just a few days ago.
What next?
Let’s look at the chart on 3 Time Frames: Weekly, Daily and 4hourly.
Weekly Chart:
After 150+ weeks, price has come to retest the ATHs of December 2017. IF price continues on this current bullish trajectory the next price target after a breakout is $23,750. I arrived at this estimate using the Fibonacci extension tool drawn from the swing low of $3,750 and projected to the first extension level of -0.27. (See Chart 1).
Daily Chart:
The $16300 price level acted as a key resistance (Lower high) in January 2018. Right now, that level seems to be acting as a strong support. Price retested it and there was tremendous buying pressure as seen by the long wicks and bounce on the daily close of the 26th and 27th of November of 2020.
The $18300 to $18800 zone is an area of value. As price approaches that zone, I anticipate that there will be some reaction.
(See chart 2) https://www.tradingview.com/x/fRkTr5AV/
H4 Chart:
I’m looking at 3 probable scenarios for Bitcoin from here as depicted by arrows 1,2 and 3.
Bitcoin breaks and closes above the ATHs of $19,800 and heads to our first Fibonacci extension level of $23,750.
2. A breakout above ATHs followed by a quick reversal. A false break out of this nature will trap a lot of bulls who are super eager to see a new All Time Highs.
3. A failed retest of the resistance zone ($18,300 — $19,400). If buying pressure isn’t sufficient enough to break this level, we may see some consolidation and an eventual break below $15,000.
(See chart 3) https://www.tradingview.com/x/QmtMUYkE/
P.S- Bitcoin is super bullish right now, and trying to pick the highs for shorting is akin to standing on the path of a moving train. A much safer level to short from will be after a reversal has been confined by a bearish break of market structure and that’s below $16,300.
Thanks for reading and always keep your risk managed.
