Bitcoin price prediction for February 2020: technicals show the coin can move higher
Let’s take a look at the charts and try to predict Bitcoin price next month.
Bitcoin's price is breaking out, despite a rally in the US dollar. Some experts believe concerns over the spread of the coronavirus have been helping to buoy Bitcoin as a "safe haven" asset. The coin has hit a fresh 4-month high, against both the dollar and the euro. It has also broken out versus gold which may show that investors are looking to Bitcoin as a safe haven asset as a replacement for gold. Let’s take a close look at these factors and try to predict Bitcoin's price next month, February 2020.
Bitcoin price in February: the technicals
Bitcoin prices have closed above a downward sloping trend line which is a breakout on a daily chart. Prices have hit a fresh 4-month high. Bitcoin has formed a bull flag continuation pattern which is a pause that refreshes higher. Short term support on Bitcoin is seen near the 20-day moving average at 9,012. Additional support is seen near the 50-day moving average at 8,204. Resistance is seen near the October highs at 10,700.
Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. This points to accelerating positive momentum. The current reading on the fast stochastic is 83, just above the overbought trigger level of 80, which is a warning sign and could foreshadow a correction.
The RSI (relative strength index) is moving higher and closing in on an overbought reading. The current level of the RSI is 69, just below the overbought trigger level of 70. With prices breaking out and the RSI attempting to push above the January highs at 70, a potential divergence could occur. If the RSI remains under 70, while prices are moving higher, a scenario would be created where prices would be moving higher as momentum stalls. This is generally a sign that a rally is moderating.
Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.
The weekly chart of Bitcoin is very constructive. Prices are higher for the second consecutive week and should close at a 4-month weekly high. The weekly MACD has generated a crossover buy signal which points to higher prices. The RSI is moving higher which points to accelerating positive momentum. The fast stochastic is also accelerating higher.
What is your sentiment on BTC/EUR?
Supply and demand
In general, the supply and demand dynamic also continue to point to higher Bitcoin prices. Bitcoin has a limited future supply and with nearly 13 coins mined every 10-minutes the total outstanding will soon come to an end. As the demand for Bitcoin rises, traders know that eventually there will no new Bitcoins that are mined. The algorithm that created the coin makes it so there will only be 21 million Bitcoins As of January 2020, 18 million Bitcoins have been mined.
What is happening with Bitcoin price
Bitcoin appears to be breaking out versus the dollar, euro, and gold. With the possibility that the coronavirus may erode the value of many currencies, investors can flock to Bitcoin. Technically, the coin has closed at a fresh 4-month high as momentum has turned positive. Look for Bitcoin to continue to climb in February testing resistance near 10,700.
FURTHER READING: Bitcoin price prediction 2020
FURTHER READING: Anticipation grows ahead of Bitcoin halving