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Bitcoin prediction this week January 20 - 26: the coin might offer a low-risk buying opportunity

By Rakesh Upadhyay

Let’s see whether the rally is likely to extend further.

There are several events in 2020 that could trigger a bull market in Bitcoin. However, it is difficult to predict the reaction of the market to these events with any certainty. Therefore, we akways turn to the charts to give us a better idea about the next possible move.

Veteran trader Peter Brandt has said that Bitcoin has bottomed out. He believes that the leading digital currency is unlikely to revisit $6,000 levels. From a long-term perspective, Brandt is positive on Bitcoin because he believes that weaker traders hands have dumped their positions, which have been picked up by the stronger traders.

Let’s do the Bitcoin price prediction for this week and see whether the rally is likely to extend further or whether the price is due a correction.

Bitcoin price prediction chart: weekly

Bitcoin prediction this week January 20: the coin might offer a low-risk buying opportunity

Bitcoin has broken out and closed (UTC time) above the downtrend line, which indicates that the downtrend might be over. However, it is unlikely to be a straight dash to the first target objective of $10,550.

The bears will make one more attempt to drag the price back below the downtrend line. This move will confirm whether a bottom is in place or not. If the Bitcoin to USD pair bounces off the support at $7,853.95, it will indicate accumulation by the bulls at lower levels. If the rebound can rise above $9,187.95, a new uptrend is likely.

Conversely, if the bears sink the price below the $7,853.95 support, it will indicate that the current breakout was a bear trap. If the price sustains below $7,853.95, it can retest the recent lows at $6,408.10. However, we give this a low probability of occurring.

The analysis of the weekly Bitcoin chart points to a retest of the breakout level. Let’s do the bitcoin price analysis of the daily chart to determine whether the retest is likely to hold or not.

BTC to USD chart: daily

Bitcoin soared above the downtrend line on January 14, which is a positive sign. Thereafter, the price consolidated close to $9,000 levels for four days, before breaking out on January 19. However, the bulls could not sustain the price above $9,000 and the cryptocurrency quickly gave back all its gains, which shows that bears are active at higher levels.

The price can now dip to the 20-day EMA, which is likely to act as a strong support. Both moving averages are sloping up and the RSI is in the positive territory, which suggests that bulls have the upper hand.

We expect the Bitcoin to USD pair to bounce off the 20-day EMA. If the rebound is strong, the possibility of a breakout of the recent high at $9,187.95 increases. Above this level, a rally to $10,552.95 is likely.

If the bulls fail to defend 20-day EMA support, the bears will try to sink the pair below $7,853.95. If they are successful, it will be a huge negative.

Though the Bitcoin price analysis of the daily chart paints a positive picture, what is the bitcoin price prediction for this week? Let’s find out.

Bitcoin price this week January 20 to 26: How to trade it

We expect the price to rebound off the 20-day EMA and resume its upwards move. As both the daily and weekly chart patterns are bullish, we suggest that traders hold their long positions with stops at $6,800. Traders, who have not yet established long positions can wait for the strong bounce off the 20-day EMA to initiate long positions.

If Bitcoin breaks below the 20-day EMA and the support at $7,853.95, though, no long positions should be taken.

FURTHER READING: Trading Bitcoin for beginners

FURTHER READING: Bitcoin vs Ethereum

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