Bitcoin price analysis for December 7-13: coin could rise above $20,000 in the short term

Bitcoin has been consolidating near the all-time high, which increases the possibility of a break above $20,000 in the next few days

Bitcoin’s price made a new all-time high last week, buoyed by sustained demand from institutional investors. Data shows that Grayscale purchased about twice the number of Bitcoin mined in November. With a continuous inflow of funds, Grayscale now has over $10.5bn worth of Bitcoin assets under management.

The institutions continue to pump in money because they believe Bitcoin will be much higher in the next few years. Bloomberg analysts expect Bitcoin to reach $50,000 in 2021. This is one of the more conservative targets. On-chain analyst Willy Woo has a target objective of $200,000 for Bitcoin by the end of 2021.

Billionaire Paul Tudor Jones also painted a bullish picture for Bitcoin. He said that Bitcoin today reminded him of the internet stocks of 1999. Therefore, he expects Bitcoin’s price to be a lot higher in the next two decades.

Will Bitcoin continue its journey northward or is it time for a correction? Let’s do the Bitcoin price trend analysis of the weekly chart to find out.

Bitcoin price technical analysis: weekly chart

The Doji candlestick pattern of the week before was resolved to the upside as Bitcoin rose to a new all-time high at $19,918.95 last week. The closing was at $19,375.50, a gain of 6.46 per cent for the week.

Whenever a new all-time high is hit, the trend is clearly in favour of the bulls. However, if the price does not break out and continue its journey higher, the bears try to fake the breakout. The bears are currently trying to do that. 

Although the upsloping moving averages suggest that bulls are firmly in command, the overbought reading on the RSI suggests that the price has run up far too quickly and could be ready for a minor correction or consolidation. 

In case of a correction, if the price rebounds off the 38.2 per cent Fibonacci retracement level close to $16,000, it will suggest that traders are accumulating on dips. The bulls will then again try to resume the uptrend by pushing the price above $20,000.

However, a break below $16,000 could pull the price down to the 20-week EMA close to $14,000 levels.

Contrary to this assumption, if the bulls buy the intraweek lows and push the price above $20,000, the BTC/USD pair could rally to $25,000.

The Bitcoin price weekly analysis shows that the bulls are not giving up any ground as they continue to buy on dips and at higher levels. Let’s do the BTC price analysis of the daily chart to spot any signs of exhaustion.

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Bitcoin price technical analysis: daily chart

Bitcoin has been consolidating near the $20,000 overhead resistance for the past few days. Usually, when the price consolidates in a tight range near a critical overhead resistance, it indicates strength and increases the possibility of a breakout.

If the bulls can push the price above $20,000, the uptrend could resume with the first target objective at $21,810 and then $23,635. 

The rising moving averages suggest that bulls have the upper hand but the bearish divergence on the RSI indicates that the momentum is weakening. 

If the price turns down from the current levels or the overhead resistance at $20,000, the bears will try to sink the pair below the 20-day EMA. 

If they manage to do that, several short-term momentum traders may dump their positions, which could pull the price down to $16,000.

How to trade Bitcoin this week

Bitcoin remains strong as the bulls are not booking profits on their positions. This could force the dip buyers to throw in the towel and enter at higher levels. 

A breakout of $20,000 could attract FOMO buying from traders who have been sitting on the sidelines. Therefore, short-term traders may consider a trade if the price sustains above $20,000 for a few hours. As this is a high-risk trade, a close stop-loss could be used.

Contrary to this assumption, if the price turns down and slips below the 20-day EMA, traders can wait for the decline to end before initiating long positions. 

Bitcoin to US Dollar
Daily change
16809.3
Low: 16762.1
High: 17091.7

FURTHER READING: Bitcoin explained simply: everything you need to know

FURTHER READING: Bitcoin vs Bitcoin Cash vs Bitcoin SV: the ultimate guide

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