Bitcoin Technical Analysis: January 12, 2020
January 13, 2020
The price of Bitcoin currently stands around $8 105 but the first strong sign of recovery could be if the price jumps above $10 000. Bitcoin is the first cryptocurrency to have existed and receive wide acceptance. Bitcoin can be accessed by everyone on the internet and this cryptocurrency enjoys the support of both developers and users communities. Bitcoin was accepted as a legal payment method in Japan and some other countries also expressed interest to accept this cryptocurrency as a legal payment method. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects. Until Bitcoin recovers, however, the price of other cryptocurrencies will not see any major developments in the near future. In the chart below (a period from February 2019), I have marked major resistance and support levels which can help us to understand where the price could move. The current resistance levels are $9 000 and $10 000, $7 000 and $6 000 represent the strong support levels.
The crypto market goes through bullish and bearish phases that hugely influence the price of Bitcoin. Bitcoin has the most effect on the overall market, but we have also seen altcoin-led rallies in the past, known as “alt seasons”. In the chart below we can see that the price of Bitcoin has advanced from $6 400 above $8 400 in less than 30 days. Bitcoin remains in the bearish phase but if the price advances above $10 000 it could be a good sign of the trend reversal. If the price drops again below $7 000 strong support that would be a strong “SELL” signal and the open way to $6 000. Bitcoin is still very risky, I also think that there are lots of other cryptocurrencies with bigger potential and with less risk.
Recommendation: Bitcoin is one of the best performers in the cryptocurrency market in the last several days. Recent events have rallied Bitcoin, spiking the cryptocurrency more than 20%. As the Iran/U.S. situation cools, so does the Bitcoin price. Despite this, I would not invest in Bitcoin currently, maybe only as the short-term trader with “stop-loss” and “take profit” orders. Bitcoin isn’t the only privacy coin competing for market share and some other cryptocurrencies could potentially limit the adoption of Bitcoin. It is important to say that bear trend is still securely in place but according to analysts, 2020 is going to have plenty of general volatility and this could push Bitcoin upwards. If the price jumps above $9 000 that could be a very good opportunity for the short term traders, short-term traders can put the stop loss at $8 800 and take profit at $9 800 or above. If the price drops below $7 000 that would be a strong “SELL” signal and the open way to $6 500 and then to $ 6 000.