The Bitcoin weekly outlook, On the Move Again

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Weekly Cryptocurrency Market Outlook, On The Move Again

Crypto Market Prepares To Move Again

After several weeks of sideways consolidation, price correction, and token rotation the crypto currency market is getting ready to move again. Over the past couple of days all major currencies have bottomed at key support levels and begun to rebound. The rebound is still early, the recent highs have not yet been breached, but when they are I see it triggering a massive inflow of capital to the cryptocurrency market.

Bitcoin – Bitcoin is up about 2.0% in Friday action as it moves up from the short-term moving average. The world’s leading cryptocurrency is lagging the rebound but still showing solid bullish technical. The move is accompanied by indicators consistent with support within an uptrend and indicative of shifting momentum. A move higher is expected but resistance is at the recent high, near $9,000. A move above $9,000 would be bullish and will open up the $12,000 level as the next target.

Litecoin – Litecoin is up nearly 3.0% in Friday action is one of the leading tokens for this rally. Litecoin is being supported by an upcoming Halving that will greatly reduce the availability of the token. Litecoin is already well above its support level, near $100, and approaching the recent high. The recent high, near $120, may provide resistance but the indicators suggest it will be broken. Once broken LTC is likely to rapidly advance to the next resistance target which is near $190. Longer-term this token, like BTC, is expected to retest the all-time high and set new ones.

Ethereum – Ethereum has been struggling with upgrades, whether to implement them or not, and that is seen in it’s price action. That said, ETH joined the global cryptocurrency rally a little late but is still performing well. Since breaking above resistance four weeks ago the token has advanced 100% and looks ready to extend those gains. The token is moving up from the short-term moving average support zone and that is good. The move is supported by one of the indicators, weakly, which is not awesome. In the near-term, price may struggle to gain momentum, in the long-term a move to retest the recent high is likely. If that is broken a move up to $400 and then $600 is probable.

Bitcoin Weekly Forecast: It’s all about whales again

On the cryptocurrency market, regulators, governments and central bankers and other big names like that are inferior to whales when it comes to generating trends and price movements. This week has offered another confirmation of this simple truth.

Bitcoin (BTC) performed an acrobatic feat by jumping from $7,200 to $7,770 and back to $7,000 just in a matter of hours. What’s more, despite all these wild gyrations, the firs digital coin is finishing the week more or less at the same levels it was started.

At the time of writing, BTC/USD is changing hands at $7,360, down 4% in recent seven days and unchanged on a day-to-day basis. From a longer-term perspective, the coin has lost over 20% in a month, extending its downside from the yearly high reached in June at $13,924.

The big fish in a cryptocurrency pond

The wild price moves that shook the market in the middle of the week were caused by large Bitcoin transactions performed by the so-called whales – long-term cryptocurrency investors that have vast amounts of coins and able to move the market with a single transaction.

As we already reported, a Twitter service Whale alert registered a BTC transaction from Bittrex account to an unknown wallet the tune of $313 million. Shortly after that, someone transferred 57,577 Bitcoin ( $415 million) to the same platform. The transaction caught the eye of the community as it was made from 19 Bitcoin addresses with different amounts of coins that finally landed on a single and relatively new account.

Soon afterward, Whale alert reported that a large Bitcoin holder transferred Tether (USDT) worth of $70 million to the cryptocurrency exchange OKEx. Such transactions are often associated with an upcoming pump as large trades move USDT to a trading platform to buy some Bitcoins.

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However, the pump was naturally followed by a dump as BTC failed to settle at new levels. Another series of whale transactions exasperated the sell-off: someone transferred about 56,000 BTC from Bittrex to 17 unknot wallets. Allegedly, those were the same coins that were deposited to Bittrex earlier on Wednesday. The community suspected that the platform was hacked, but Bittrex denied the allegations.

Bitcoin’s long term picture

From the long-term perspective, BTC/USD is glued to pivotal $7,350. This technical area is created by 61.8% Fibo retracement for the upside move from $3,226 low to $13924 high and SMA50 (Simple Moving Average) weekly. The inability to move away from this area locks the price in a tight range and set the stage for a strong move in either direction once the breakthrough occurs.

On the upside, we need to pass $7,770 (this week’s high) and $7,900 ( the highest level of the previous week), before we get to psychological $8,000. Once it is out of the way, BTC/USD will get a chance for an extended recovery; however, there is another strong barrier standing on its way. Strong resistance is located on the approach to $8,300 and strengthened by SMA50 (Simple Moving Average) and the middle line of the Bollinger Band on a daily chart. May cryptocurrency experts consider it to be a borderline that separates us from a sustained recovery.

Considering neutral RSI (the Relative Strength Index) on a daily chart, a strong upside move looks unlikely at this stage. However, an Evening Star candlestick pattern on a weekly chart implies that BTC is ripe for reversal. The pattern requires a confirmation in the form of another higher weekly close.

On the downside, Once $7,000 is out of the way, the sell-off is likely to gain traction with the next focus on $6,800-$6,750 ( the lower lines of the weekly and daily Bollinger Bands). This support area separates us from a deeper decline towards $6,500 (the lowest level the previous week). A sustainable move below this barrier will bring the sellers back to the market and create a pre-condition for an extended decline towards $5,000 reinforced by SMA200 (Simple Moving Average) on a weekly chart.

BTC/USD, the weekly chart

The Forecast Poll of experts improved since the previous week. The expectations on all timeframes turned bullish on weekly and quarterly timeframes, though stayed bearish on monthly timeframe. The average price forecasts stay below well 8,000. Moreover, an overview chart shows that average targets short-term timeframes declined. The 1-quarter average forecast improved from 7520 last week to 7862 this week, which means that analysts are more optimistic about Bitcoin’s long-term outlook.

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Bitcoin Monthly Outlook – December 2020

To say that November was a good month for the bitcoin bulls would be an understatement. The prices almost doubled during the month with the lows coming in at around the $5500 region and the highs coming in at around $11500 during this period. None of the bad news and adverse comments about bitcoin seemed to matter to the bitcoin bulls and speculators who were intent on pushing the prices higher and during the course of this period, they managed to achieve the coveted target of $10,000 which was a huge psychological mark which many of the investors and traders would have had in their mind some months back.

Bitcoin Market Zooms Ahead

The fact that this price was achieved much before the end of the year and that the prices overshot this region to move beyond the $11,000 region during the month was a sample of how strong this bull run has been during the month of November. In fact, this was the month when the bitcoin market faced one of its biggest challenges as the hard fork that was scheduled to happen during the middle of November, was cancelled and this led to some correction in the industry as the uncertainty that this event led to, brought in some confusion among the traders. The fact that the developers could not agree on a proper approach has made the investor doubt on how the industry would react for future hard forks and this kept the prices under pressure for a few days.

This also led to the migration of a few miners and investors to other markets like bitcoin cash and ethereum and once again, it looked as though the bitcoin prices would crash a lot more. But this uncertainty and correction lasted only for a few days as the market shrugged off the same in a matter of days and resumed the uptrend in a strong manner. During the course of the month, there were many comments from various people, ranging from central bankers to hedge fund leaders, both in support of and against bitcoins but the impact of all these on the bitcoin market has been minimal.

But one factor that did help to boost the prices was the news that the CME and the CBOE are looking to launch futures trading in bitcoins. Of course, this requires the approval of the regulators, which is likely to be a big challenge, but this also throws open the doors for the launch of bitcoin futures in other major exchanges which is likely to help the bitcoin market to continue to mature in a quick manner.

Bitcoin Prices Likely to be Highly Volatile

Looking ahead to the month of December, though the rest of the market is likely to be affected by the drying up of liquidity towards the close of the year and this is likely to bring down volatility in those instruments, this lack of liquidity could divert the investors and funds towards the bitcoin market which could add to the bullish scenario and also lead to a lot of volatility in the bitcoin prices over the next month.

With the prices having broken through the $11,000 region and with us already having seen a correction back to the region of resistance turned support, the way is clear for the bitcoin prices to continue on their way up in the coming month and the lack of volatility in the other markets could only help the bitcoin traders. With this background, we would not be surprised if the prices break through the $12,000 region and head towards the $15,00 region during the course of the month. Of course, we are seeing more and more regulators beginning to sit up and take notice of bitcoins as the prices grow and more and more traders are drawn into the market and so the traders have to be aware of the developments on the regulatory front as well as any major moves like banning of trading in a major country could affect the bitcoin prices and lead to some large scale correction within a matter of a few hours, something that we have seen many times over. Stick to regions of support and resistance and with the technicals being the guiding force in this market, which does not rely too much on fundamentals, it is important for the traders to take note.

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