Let me just say, Bitcoin had one hell of a year. I haven't written a Bitcoin update in months, the last one being on the break of $12,000 and I've been unrelentingly bullish ever since so saw no need for an update. I will say I didn't expect the old all-time high to give out without a deeper retrace, but like I said, what a year for Bitcoin, there was nothing holding it back. As I write this BTC is sitting at $29,000 and doesn't look ready to quit just yet. So with 2021 looming, let's take a look at what's in store.
I don't even have commentary on the monthly chart - it's just basically a giant bullish exclamation mark. I don't anticipate we revisit any of these monthly levels in the near future, but if there was a chance to buy Bitcoin just under $20,000 you better believe I'm buying big.
The weekly chart is much the same, but I want to call out something here in particular. Way back when we broke $12,000 I had two main targets in mind - $20,000 and $30,000. Not only are these nice round psychological numbers, but they are significant as well with one being the former all time high and the other representing the 1.618 fib extension of the move from $20,000 to the low $3,000's.
I don't own any crystal ball, but this latter figure is the vicinity where I envisioned Bitcoin's next local top to form. Now there's certainly no signs of Bitcoin topping yet, and I had originally planned on selling a large amount of spot here, but for the time-being I remain spot long given macro conditions while I start to close out most leveraged Bitcoin positions. The rally Bitcoin has had this year has been utterly insane so it's natural to see a deep correction at some point, and given the significance of this level, regulatory issues with XRP and potentially USDT, and a slow down in institutional buying, I'm playing it safe here and setting myself up for the possibility of a large retracement.
If there is a retracement, where would I be looking to buy? Although a re-test of former all time high is pretty much a trader's wet dream, if Bitcoin is truly as bullish as it appears to be, I don't think we re-test that level any time soon - dip buyers will be left in the dust. I do think eventually we re-test the 21 week EMA (currently around $17,000) but think we do it once it has cleared $20,000. Assuming Bitcoin reaches $30,000 I'm putting a 20-30% correction on the table. A 20-25% drop would line up nicely with a cluster of daily support just above $24,000 and that's where I'm likely to look first. A 30% drop would be a site to see and would wipe out the former daily levels, leaving everyone bearish, while never giving buyers the opportunity for the re-test bid. That being said, the $26k support level would have to give out before putting these on the table.
Regardless, Bitcoin has cemented itself as one of the most prized assets out there and I see a very bullish future for it. After we see Bitcoin correct, or if it just continues relentlessly up, I see $48,000 in the cards.
Resistance: Technically none, but $30,000 is a key level
Weekly/Monthly Support: $19,500-20,000
Daily Support: $26,500 then a cluster between $23,000-$24,000
It's been a bit painful for ETH holders watching Bitcoin absolutely shred resistance while Ethereum lags significantly in comparison and the ETH/BTC pair wilts. However, last week ETH finally showed some strength breaking through and reclaiming a key weekly level. Now, the $800 region stands as a major obstacle.
The real question though, is Ethereum a better own than Bitcoin? Again, no crystal ball, but at this stage, I do believe the answer is yes (though I wouldn't advise dumping all your Bitcoin for ETH). Simply put, Bitcoin is incredibly extended and has outperformed everything. A period of consolidation will send Ethereum on a race to catchup and we're still more than 2x away from all-time high. Simply put, R/R favors Ethereum here. I see ATH's in 2021.
My predictions on Bitcoin strength since my update months ago have held true and Bitcoin has proved itself as one of the most bullish assets in the world. We're nearing a logical local top, so although I'm nowhere near bearish, it's worth making sure you're set to handle a 20-30% drop if it does happen. Ethereum has been lagging and may have a few more shakeout attempts in store but I do see ATH's in 2021 which means it's great R/R.
As always, I'm trading BTC on Bybit which remains the undisputed best option for trading Bitcoin with leverage in my opinion. They also offer great sign up bonuses and are the best option for KYC-Free margin trading ups so if you want to learn more you can also read my full review of Bybit.
Make sure you don't miss the latest reviews & tips from Crypto Advocate. Subscribe today!
Disclaimer: this is not financial advice and cryptoadvocate.net is in no way responsible for any claims, losses or expenses that may result by following information available on this site.
cryptoadvocate.net may be entitled to referral bonuses when readers make use of referral links on cryptoadvocate.net