Bitcoin Daily Price Forecast (10/29/20) — Selloff or Beartrap?

Bitcoin fell hard on Tuesday, selling off alongside equities and gold, both of which fell multiple percentage points during the Europe and US trading sessions. Bitcoin dropped down to below the $13,000 level before bouncing, eventually settling around the $13,275 level. Markets did close at the daily lows which usually indicates more weakness ahead, the likes of which will probably drag down Bitcoin along with them.

Outlook: Bitcoin sold off a bit on Tuesday, actually reaching up to the $14,000 level before finding resistance and dropping about $1,000 before finding support, recovering to slightly above $13,000. Bitcoin got a bit extended in this recent move up, but not overly so, so I think today’s selling in traditional markets just added another reason for the sellers to step in as Bitcoin reached up to overbought levels. The $13,000 — $14,000 level is probably the last major resistance level before Bitcoin shoots up to $20,000, so there should be some chop in this region. Going forward I expect continued sideways action around this area, though far from impenetrable. There might be a relief rally in traditional markets the next couple of days, which would probably be bull traps, as I fully expect that the selloff is far from over. COVID is surging all over the world, countries are shutting down, a second stimulus package seems extremely unlikely to be passed until well after the US Presidential Election, which is less than one week away. That being said, I’m a buyer on dips in Bitcoin, as I fully expect Bitcoin to be at higher prices this time next year than they are now. Volatility is here; buckle up and save your dry powder for what’s yet to come.

Support: I see support at $12,000, 50 Day EMA around $11,500, $11,000 and then ironclad support at $10,000.

Resistance: Resistance is between $13,000 — $14,000, probably closer to $14,000 now, as Bitcoin appears to have actually found some support today around $13,000… but we’ll see if that holds. If Bitcoin breaks impulsively above $14,000, I think it’s a pretty straight shot to $20,000, though I don’t think that happens until after the election, possibly closer to the Santa Claus rally.

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