Bitcoin Daily Price Forecast (10/27/20) — Volatility Season is Here!
Bitcoin had a wild start to the week, initially rallying to a new high before pulling back, forming a bit of an inverted hammer before closing the day slightly in the green. Despite having reached a slightly higher high today, this is the volatility I believe should be expected over the next few weeks.
Outlook: Bitcoin rose a bit today, swinging wildly up, then down, then settling just above yesterday’s close for a green mock-inverted candle. Volatility is entering the markets amid COVID cases spiking around the world, countries starting to shut down again, the US presidential election 8 days away, and stimulus talks seemingly at a standstill until at least after the election. Equities markets fell today as the US Dollar perked up, both of which put pressure on Bitcoin, which is resilient but not impervious- at least not yet. As you can see in the Daily chart above, Bitcoin is at the top of the ascending channel, which shows it might be a bit overextended, but that’s just a rough trendline and just adds a layer of possible resistance. I wouldn’t be shocked to see Bitcoin pull back alongside equities as equities suffer from volatility and increased selling going into a very contentious and uncertain election alongside COVID fears. However, any pullback is a buying opportunity in my eyes, as once the dust settles from the election and a new stimulus package is approved, that should pave the way for a strong Q4–2021 Q1 rally, the likes of which should bolster Bitcoin even moreso.
Support: If Bitcoin were to pullback, look for support at the $12,000 level which should be new support, the 50 Day EMA around $11,300 and the $11,000 level, which is former resistance. Below that, which I think we probably don’t see anytime soon unless there’s a major shock to the global economy or COVID spike again, $10,000 should be a huge support level, which is also now buoyed further with the rising 200 Day EMA just below. I don’t quite consider $10,000 to be my line in the sand quite yet, but I do view it as the single strongest near-term support level of Bitcoin.
Resistance: $13,000 or possibly $14,000 is probably the last “major” resistance level between Bitcoin and the ATH’s again. That being said, I don’t think this is a particularly significant level, and given the recent array of tailwinds to BTC’s bull case, I wouldn’t be surprised to see that level crested sooner rather than later. Maybe Bitcoin pulls back a bit, buyers step in to buy the dip, and Bitcoin continues upward.
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