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Bitcoin prediction this week: Should I buy it now?

By Rakesh Upadhyay

The coin is showing the possibility of a double bottom.

In the financial world, investors are usually interested in long-term prospects while traders look to benefit from the swings in the short to medium term. The long-term investors view dips as a buying opportunity. For example, billionaire entrepreneur Tim Draper is unfazed by the recent decline and has retained his Bitcoin target of $250,000 by 2022. He anticipates Bitcoin’s halving in May 2020 to be a major trigger for the next bull run.

Founder and CEO at BKCM LLC Brian Kelly and Fundstrat Global Advisors co-founder Tom Lee also share Draper’s bullish view on Bitcoin. While these long-term targets offer huge upside potential from current levels, investors should be willing to sit through crunching bear phases, which can be mentally taxing. 

The traders, therefore, do not look at the long-term picture alone but try to ride the up moves in the market and sit out during the downtrends. Let’s see if Bitcoin price analysis shows us any buying opportunity.

Bitcoin price prediction chart: weekly

The bulls are attempting to form a bottom close to the strong support at $6,500. During the week, though the bears broke below this support lower levels attracted buying, which is a positive sign. It shows that traders are keen to buy on dips rather than panic and dump their positions.

If the bulls can push the price above $7,853.95, it will form a short-term double-bottom pattern that has a minimum target objective of $9,205.75. Above this level, the rally can continue to $10,552.95. 

Contrary to our assumption, if the bulls fail to sustain the price above $7,853.95, the BTC to USD pair might remain range-bound between $6,500 to $7,853.95 for a few weeks. The downtrend will resume if the bears sink the price below $6,400 and sustain it. 

BTC to USD chart: daily

The sharp bounce off $6,508.10 on December 18 was a positive sign. It shows that the bulls are waiting to buy at lower levels. The bears attempted to stall the pullback at the 20-day EMA but the rally on December 22 scaled above it. This was the first time that the price of Bitcoin had closed (UTC time) above the 20-day EMA since November 15.

Currently, the bulls might face stiff resistance at $7,853.95. The 50-day SMA is also placed at this level, hence we anticipate the bears to defend this level aggressively. The 20-day EMA has flattened out and the RSI has risen into the positive territory, which indicates that the sellers are losing their grip.

If the price turns down from $7,853.95, the BTC to USD pair might remain range-bound for a few more days. Conversely, if the bulls can propel the price above $7,853.95, a move to the downtrend line is likely. We anticipate this level to offer stiff resistance but, once crossed, a new uptrend is likely.

Bitcoin price this week: how to trade it

The traders can wait for the price to close (UTC time) above $7,853.95 before buying 50 per cent of the desired allocation with a stop loss of $6,400. The remaining position can be purchased after the leading cryptocurrency rallies above the downtrend line at about $8,700. We suggest traders remain on the sidelines if the price fails to sustain above $7,853.95.

FURTHER READING: Bitcoin price prediction for January 2020: will it bounce into next month?

FURTHER READING: Bitcoin price prediction 2020

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