Bitcoin price analysis for November 30-December 6: coin could remain range-bound for a few days
Bitcoin may remain range-bound near the overhead resistance before attempting a breakout to a new all-time high after a few days
Bitcoin’s price witnessed a volatile week but the bulls emerged victorious as lower levels saw huge buying. Although several retail investors are skeptical to buy due to the sharp run-up in price in the past few weeks, the institutional investors continue to buy aggressively.
The Chicago Mercantile Exchange has become the largest Bitcoin futures provider, according to Arcane Research. CME Bitcoin futures recorded a $1.16bn open interest to surpass the OKEx open interest at $1.07bn. This shows that the recent fall has not scared the institutional investors away.
Guggenheim Funds Trust has sought the approval of the US Securities and Exchange Commission to permit its Macro Opportunities Fund to keep 10 per cent of its net asset value in Bitcoin through the Grayscale Bitcoin Trust.
With huge institutional buying interest, can Bitcoin hit a new all-time high? Let’s do the Bitcoin price trend analysis of the weekly chart to find out.
Bitcoin price technical analysis: weekly chart
Bitcoin formed a Doji candlestick pattern last week as it gyrated violently from an intraweek high of $19,520.20 to a weekly low of $16,203.35, but closed at $18,200.45, marginally down by 1.30 per cent.
After a strong rally, if the correction does not deepen below the 38.2 per cent Fibonacci retracement level, it suggests that the demand remains strong as bulls are not waiting for a deeper correction to buy.
If the bulls can now push the price above $19,520.20, the next leg of the uptrend is likely to begin. The $20,000 level may act as a psychological barrier but once crossed, the rally could pick up momentum and quickly move up to $25,000.
While the indicators remain bullish, the deeply overbought reading on the RSI warrants caution.
If the price again turns down from $19,520.20, the pair could remain range-bound for a few days. A deeper correction is likely to start if the support at $16,203.35 gives way.
What is your sentiment on BTC/USD?
The Bitcoin price weekly analysis shows that the bulls are buying aggressively on dips. But can the demand sustain at higher levels? Let’s do the BTC price analysis of the daily chart to find out.
Bitcoin price technical analysis: daily chart
The bulls did not allow Bitcoin to sustain below the 20-day EMA on November 26 and 27. This shows that instead of panicking, the bulls used the dips to accumulate as they anticipate higher levels in the future.
The three consecutive green candles since November 28 suggest that the bulls continue to buy at higher levels. The upsloping moving averages and the RSI in the positive zone suggest that bulls are in command.
However, the bears are likely to defend the $19,520.20–$20,000 resistance zone aggressively. If the price turns down from this zone, a few days of consolidation is possible.
A breakdown and close below the 20-day EMA will be the first sign that the bullish sentiment has weakened and the lower levels are not attracting buyers. The selling could intensify below $16,203.35.
How to trade Bitcoin this week
The dip in Bitcoin offered a buying opportunity to the traders, as suggested in the previous analysis. Buying on a rebound off the 20-day EMA confirms that the uptrend is intact and also gives a good stop-loss point to the traders.
As the price nears the $19,000–$19,520.20 resistance zone, traders can tighten their stop-loss because the bears are likely to defend this zone aggressively and that may cause sharp price corrections.
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