Bitcoin - Technical Analysis - Mon, Jan 6, 2020
Escalating political tensions between the USA and Iran significantly increased the demand for safe-haven assets last week. For instance, the price of gold surpassed the level of $1,550.00 per troy ounce, nearing a six-year high. Other safe-haven assets including Bitcoin followed the same price dynamics. The digital gold reached almost $7,500.00 on Sunday.
Cryptocurrency experts expect the demand for safe havens to increase throughout 2020 as many investors will flee unpredictable financial markets if political instability and trade wars in the global arena continue. We think in such a scenario, Bitcoin's price may reach again $10,000.00 this year.
There are even much more optimistic predictions. On Friday, Jan 3, Antoni Trenchev, cofounder of NEXO, in an interview on Bloomberg said Bitcoin could easily hit $50,000.00 by the end of 2020. He based his price prediction on a combination of different factors such as upcoming Bitcoin halving, attempts of some countries to evade US economic sanctions by ditching dollar, and increasing demand for not centralized assets such as physical gold and crypto.
The cryptocurrency market starts the week on a positive foot. Most of the major digital coins are trading in the green zone. At the moment 1 Bitcoin costs $7,536.27, according to Coin360:
Bitcoin Technical Analysis
On the daily chart (D1), although the price of Bitcoin remains within the «descending channel», it is moving slowly but steadily towards the upper channel line:
If BTC continues to increase in price, then within two weeks it may reach the upper bound of the channel - a level equivalent to $8,366.50.
It is important to outline that Bitcoin's price fluctuated near the 30-day moving average (MA) for almost three weeks, showing some indecision between the bulls and the bears. But today BTC is struggling to remain higher than the 30-day MA:
If the bulls manage to keep the price higher than the 30-day MA, then BTC/USD will continue to climb within the «ascending channel» on the 3-hour chart. Otherwise, the bears may retake control and put an end to the «ascending channel»:
In case of a bullish scenario, the closest resistance level is the 50.0 Fibonacci retracement level or $8,336.50. In case of a bearish scenario, the closest support level is the 23.6 Fibonacci retracement level or $5,753.80.
In conclusion, although, theoretically on the daily chart Bitcoin remains in a downtrend, the bearish sentiment is fading. On the 3-hour chart the market sentiment is neutral.
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