Bitcoin price analysis for October 12-18: the coin could rally to $12,000 in the short term
Bitcoin has broken out of the downtrend line, which shows a possible change in trend
Square, Inc. became the second listed company after MicroStrategy, to acquire Bitcoin. The Jack Dorsey led Square acquired 4,709 Bitcoins at an aggregate price of $50m, which is about one per cent of the company’s total assets at the end of Q2 2020.
This move by the listed companies to invest in Bitcoin is a confidence booster and it could attract similar moves by the other technology-savvy investors.
Bitcoin investors have been waiting for a Bitcoin exchange-traded fund for the past few years but the US regulator has repeatedly shot down applications for the ETF. However, SEC Commissioner Hester Peirce believes that this could change as “a wide spectrum of people, both inside the crypto space as well as inside the traditional financial institutions” seek the regulator’s guidance.
Bloomberg’s crypto newsletter has projected a bullish picture for Bitcoin’s price. The author suggests that, even if Bitcoin’s gain slows down to half of the 1,400 per cent growth seen since 2016, Bitcoin could rally to $80,000 by 2024.
With the up-move of the past week, has Bitcoin resumed its uptrend? Let’s do the Bitcoin price trend analysis of the weekly chart to find out.
Bitcoin price technical analysis: weekly chart
The coiling of the price action in the past few weeks snapped to the upside and Bitcoin surged 6.57 per cent to end last week at $11,374.20.
The breakout of the downtrend line suggests that the correction is over as the bulls have overpowered the bears.
Both moving averages are sloping up and the RSI is above 60, which suggests that the bulls are in command. The up-move can reach $12,065 and then re-test the yearly highs at $12,481.65.
If the bulls can push the price above $12,500, the momentum is likely to pick up. This bullish view will be invalidated if the BTC/USD pair turns down from the current levels and drops below the 20-week EMA.
Such a move will suggest a lack of demand at higher levels and that could attract shorting by the aggressive bears.
The Bitcoin price weekly analysis suggests that the bulls have asserted their dominance, but can the uptrend pick up momentum in the next few days? Let’s do the BTC price analysis of the daily chart to find out.
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Bitcoin price technical analysis: daily chart
The failure of the bears to sink the price below the uptrend line attracted aggressive buying by the bulls who pushed Bitcoin above the downtrend line and the moving averages on October 8.
The moving averages have completed a bullish crossover and the RSI has risen above 63, which shows that the advantage is with the bulls.
However, the bears are unlikely to give up easily. They are currently trying to stall the up-move at $11,500. The inside day candlestick pattern on October 11 shows indecision among the bulls and the bears.
If the bulls can resolve this uncertainty by pushing the price above $11,500, the next leg of the uptrend could start. This assumption will be invalidated if the bears sink the price below the 20-day EMA.
How to trade Bitcoin this week
Bitcoin broke and closed (UTC time) above the downtrend line on October 9, which triggered the buy suggested in the previous analysis. Traders who have entered this position may keep their stop-loss at $10,700.
If the price breaks above $11,500, the stops can be trailed higher. Partial profits can be booked if the bulls struggle to drive the price above the overhead resistance at $12,000.
As the indicators are turning positive, short positions could be avoided and dips may be viewed as a buying opportunity.
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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