In this weekly BTC/USD analysis, we will be taking an in-depth look at the most recent technical formations, as well as look for the possible short-term price outcomes.
Bitcoin has spent the past week recovering levels it lost in a Nov 25 crash and even managed to push to a new all-time high on some exchanges. Still, the end-goal of Bitcoin above $20,000 was not reached.
Bitcoin’s institutional activity is more than booming, with news coming out left and right about companies investing in crypto, financial institutions preparing to embrace Bitcoin as an asset class, as well as regulators allowing Bitcoin to be held in employees’ company-funded 401k plans. On the other hand, Not being able to push past the $20,000 resistance level due to an incredible amount of sell orders near it has brought Bitcoin bears another day of hoping that the price will go lower.
Bitcoin has continued moving up until reaching an all-time high on some exchanges and then creating a doji candle followed by an inverted hammer candle on a weekly time-frame, indicating a possible bearish outlook as Bitcoin has most likely reached its short-term top. Looking at the shorter time-frames, such as the 4-hour one, we can see that Bitcoin has formed either a triangle formation or (if we include the movement from that started on Nov 27) a bull flag, which goes against the previously mentioned bearish outlook. Any break from the channel Bitcoin is trading in at the moment could mean a strong move towards that side.
The hash ribbons indicator flashed a BUY signal, which is an incredibly important update for long-term investors, as this indicator was the most consistent investment tool when it comes to RoI.
Bitcoin’s sending out mixed signals on different time-frames, indicating indecisiveness from the retail sector. On the other hand, companies and institutions show incredibly bullishness as they are buying up Bitcoin over-the-counter. While a move to the downside is quite possible at the moment, the overall current trend is bullish, and short-selling could possibly harm traders’ portfolios more than they can improve it.
1: If Bitcoin fails to establish itself above $19,100 and breaks the range to the downside (slightly less likely), its most likely target will be $18,450. Due to a large number of buy orders in the zone between $18,190 and $18,450, this is the most likely place for reaccumulation and a push towards the upside after a pullback.
2: If Bitcoin manages to push towards the upside, first breaking $19,100 and then the descending black line (top line of the triangle formation), we can expect the price to attempt another push above $20,000, with the possibility of breaking it this time. If Bitcoin proves to be in a bull flag formation rather than a triangle formation, the profit target stays the same ($19,666 with possibly taking some profits along the way).
Entering any trade with having a target of above $20,000 is quite risky, and it would be better to play it safe and end the trade pre-$20,000 and then re-enter it if the price confidently moves up. The same goes for entering a short trade with sub-$18,450 in mind.