Where will Bitcoin go from here? | The Gold Forecast

Where will Bitcoin go from here?

November 10, 2020 - 4:57pm

 by Joseph M. Wagner II

While Bitcoin just hit a record high that hasn’t been touched upon since early January of 2018 when Bitcoin had a “dead cat bounce” on its way down from record highs. This “dead cat bounce” or short-term recovery amidst a declining market occurred at the end of December 2017 and brought prices briefly higher from roughly $13,500 up to $16,500 in early January 2018. By the end of January pricing fell swiftly to under $9,000 and by January 2019 Bitcoin was trading at around $3,500.

I am mentioning this dead cat bounce because it highlights one of the most critical and key levels in BTC pricing, $13,500. This price point has other historical significance in that it was roughly the high witnessed for 2019 and the resistance point that BTC had to overcome in this current rally to reach the highest price achieved in years. I believe this price point is far from done in serving as a deciding level for further movements and breakouts.

Its technical significance is strong also as this is the 61.8% Fibonacci retracement level spanning the entire range since the inception of futures for Bitcoin. To get to where we are now from the lows seen in March, we have had to overcome four of the five Fibonacci levels in this data set that encompass all futures trading in Bitcoin. Of those four levels taken out you could make an argument for one being tested slightly (the 38% at $9,600) but have yet to correct and fall beneath any of these levels after a clear breakout was achieved.

Although I view BTC as very bullish in the long-term the recent unwavering almost parabolic rise from the lows in March has little chance of continuing higher. Before $20,00 can be challenged BTC I believe must undergo a correction of some sort followed by a consolidation period before it can effectively take out the last obstacle between current and all-time record-high pricing.

That being said a shallow correction would take it back $13,500 but even as low as $11,500 is completely feasible and should be anticipated as a likely event. Below that $9,500 would be the next level I feel safe in forecasting this as the lowest level that BTC will retrace to and is less likely but entirely possible.

For that reason, we will be looking to short or sell the market in hopes to gain profits from this increasingly likely scenario in Bitcoin futures.

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