Bitcoin price analysis for September 01-07: the bulls could challenge the $12,500 resistance in the next few days
The bulls are attempting to resume the uptrend in Bitcoin, which is likely to pick up momentum above $12,500
The US Federal Reserve Chairman Jerome Powell announced a major policy shift when he said that the central bank will allow inflation to overshoot the 2 per cent target if it spends a long time below that level. A few analysts believe that this could mean that the Fed might keep interest rates closer to zero per cent for the next five years or more.
Tyler Winklevoss, co-founder of Gemini, believes that “inflation is coming” due to huge money printing and investors will gravitate away from the dollar. That is likely to boost safe haven assets and Winklevoss believes that Bitcoin could overtake gold as the main store of value.
Gold’s market capitalisation is closer to $9trn and, to overtake it, Bitcoin’s price will have to surge over 45 times from the current market cap of just above $200bn. This gives Bitcoin a target objective of $500,000.
Let’s do the Bitcoin price trend analysis of the weekly chart to see if the long-term picture has turned bullish.
Bitcoin price technical analysis: weekly chart
Bitcoin managed to close last week in the green as it moved up marginally by 0.54 per cent to end at $11,715.15.
The long tail on last week’s candlestick shows that the bulls continue to buy at lower levels, which is a positive sign. They will now try to propel the price above the $12,500 resistance and resume the uptrend
If they succeed, the next target on the upside is likely to be $13,839.90. The 20-week EMA is sloping up and the RSI is closer to the overbought zone, which suggests that the advantage is with the bulls.
Contrary to this assumption, if the BTC to USD pair turns down from the $12,500 resistance, a few weeks of consolidation between $12,500-$10,500 is likely.
The Bitcoin price weekly analysis shows that bulls are accumulating at lower levels, which is a positive sign.
Can the bulls propel the price above the overhead resistance and resume the up-move or will the range-bound action continue for a few more days? Let’s do the BTC price analysis of the daily chart to see if any bullish setups are developing.
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Bitcoin price technical analysis: daily chart
Bitcoin broke and stayed below the 20-day EMA from August 25 to 29 but the bears could not intensify the selling and sink the price below the $11,000 support.
The failure of the bears to sink the price lower attracted aggressive buying by the bulls who pushed the price above the 20-day EMA on August 30 and are currently attempting to scale the price above the $12,000 resistance.
If they succeed, a retest of $12,481.65 is possible. A breakout of this resistance will resume the uptrend.
The 20-day EMA has started to slope up and the RSI has risen into the positive territory, which suggests that the bulls have the upper hand.
However, the bears will attempt to stall the up-move at $12,500 and if the price turns down from this resistance, the range-bound action is likely to extend for a few more days.
How to trade Bitcoin this week
Bitcoin could face stiff resistance in the $12,000-$12,500 resistance zone but, if the bulls can propel the price above it, the uptrend is likely to resume. This could offer a buying opportunity to the aggressive trader.
Conversely, if Bitcoin turns down from the current levels or the overhead resistance and breaks below the 20-day EMA, it could again drop to $11,100 levels.
FURTHER READING: Bitcoin explained simply: everything you need to know
FURTHER READING: Bitcoin vs Bitcoin Cash vs Bitcoin SV: the ultimate guide
