Bitcoin rallied during the week ending January 31, going back and forth amid high volatility from the Gamestop vs Wall Street war causing Bitcoin to trade in a nearly $10,000 range between $29K and $39K, ultimately closing the weekly candle with long legs but a positive finish just below the $35K level. This is a slightly bullish candle as Bitcoin appears to be trying to put in a bottom here on the weekly chart and carving out a range here in between the $30K and $40K levels.
(January 31, 2021 7:30PM EST)
Outlook: Bitcoin had a volatile week last week, falling below $30K for a moment before catching a rocket up to nearly $40K again following crypto bullish amid the Gamestop vs Wall St spectacle and Elon Musk adding “#bitcoin” to his Twitter bio, indicating his long-awaited realization that Bitcoin is indeed the future.
As you can see in the chart above, bitcoin opened up this weeks candle slightly Barash which may be tied to weekend selling during Finley treated markets, possibly by legacy financial institutions to suppress Bitcoin’s price, or A negative futures open for equities as Asian trading opens up Sunday evening eastern time. I don’t put a lot of stock into this as bitcoin appears to be very resilient around the $30,000 level, grazing it multiple times over the past few weeks only to find support, like last week. In fact, bitcoin reaching up to nearly $40,000 again last week was very bullish as it shows not only that buyers are ready and willing to buy the dip’s but it’s a higher high In this short term correction, which may be coming to a close In the near term.
Looking at the chart, it looks like Bitcoin is putting in a bottoming pattern and rebuilding momentum to resume higher to the $40,000 level again which is near-term resistance. However, I think this correction has digested a lot of the gains and cooled off the overly bullish and parabolic market sentiment, and with this new wave of disenfranchised ex-Robinhood Individual traders protesting traditional markets being actively and undeniably manipulated by Wall Street funds and clearinghouses, this paves the way for even more retail adoption of bitcoin and crypto by individual traders protesting traditional markets. Long story short? I think this is the groundwork for a Bitcoin rally to higher highs around the $50,000-$60,000 level where Bitcoin will finally reach a $1 trillion market cap.
In traditional markets, recently gold and silver have also been relatively sideways after putting in what appears to be higher low bottoms, and the US dollar has experienced more weakness after an initial rally. These are bullish factors for Bitcoin according to historical correlations. All of this considered, I think now is the perfect time to buy the dip as Bitcoin is trading at a 25% discount of the current all-time highs, which will not last long, and resumes higher to end 2021 and enter 2022 with eyes on $100K. Anyone with an eye to the future would be wise to buy Bitcoin on dips or even earn Bitcoin however possible before it’s too late/expensive.
Support: Look for support around the $30K level, which has been under pressure and has already been breached once but appears to be holding despite repeated selling attempts. Next, I would look lower around the 38.2% fib at $28K, 50% fib at $25K, and my absolute floor is $20K at this point.
Resistance: Look for resistance at large, round psychological numbers in $5,000 intervals: $40K, $50K, etc. I imagine $50K would be strong resistance, although the bigger Bitcoin gets the more legitimacy it gains = more institutional investors can justify taking initial positions.