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Bitcoin Weekly Outlook: Time to Fall and Find a New Price Base

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Bitcoin underwent a considerable downside correction after [almost] hitting $16,000 on Friday last week.

The plunge followed a massive upside rally that started amid the US presidential election season. Traders anticipated that a decisive political contest would pave the way for a long-pending second coronavirus relief bill. As a result, people will start shifting their capital from anti-risk currencies to ant-fiat assets.

Bitcoin benefited from the global market sentiment as it acted as a hedge against the US dollar. The cryptocurrency’s bids surged as the greenback fell. And a confirmed victory for Joe Biden, the Democratic nominee who promised to expand government spending programs against the coronavirus pandemic, increased further prospects of a higher Bitcoin.

This Week

The US election results have come with their share of political drama. Incumbent President Donald Trump has filed lawsuits in his bid to contest election votes for Mr. Biden. It has brought some uncertainty into the financial markets as states tally more votes in the days ahead.

Meanwhile, the Senate contest in Georgia is also looking to head for a runoff. Experts note that the final result won’t arrive until early January. They also think that Republicans will retain the majority in the Senate House. It would mean delays for Mr. Biden in passing the spending bills that he promised in his election campaign.

For Bitcoin traders, it is now the matter of when not if. The rising number of coronavirus cases in the US has raised the possibility of a second relief package. No politician can ignore the American public as their states enter partial or full lockdowns like in the European countries. Ultimately, a package will arrive.

The waiting is the only bullish exercise an average Bitcoin trader can do.

Meanwhile, those with a restless, short-term risk appetite would prefer selling their positions at the current higher levels. Against a lower buying demand in the absence of concrete interim fundamentals, the Bitcoin price can, therefore, descend to find a new support base.

Bitcoin Outlook, Explained

Between Monday and Wednesday, there are no influential market events this week. On Thursday and Friday, however, the market can expect some volatility as authorities release Consumer Price Index, Initial Jobless Claims, and Consumer Sentiment reports concerning the US economy.

Meanwhile, the Federal Reserve will keep interest rates near-zero, and the stimulus will remain at an impasse. That leaves Bitcoin traders with ample reasons to secure their short-term profits in cash.

Bitcoin shows signs of correction after almost hitting $16,000. Source: BTCUSD on TradingView.com

The fundamentals fit the technical bias. Bitcoin continues to stay inside an overbought territory that amounts to a further downside correction. Should that happen, the BTC/USD exchange rate is looking at the $13,500-$14,500 area to offer support. Any extended fall below the range would bring the $10,500-support in view.

Bitcoin is 113 percent up on a year-to-date timeframe.





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Bitcoin sheds $2.5K amid warnings of a repeat BTC price dip

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Bitcoin (BTC) fell precipitously on June 25 after a rejection above $35,000 sparked a rout toward familiar support.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin heads back towards $30,000

Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it shed over $2,500 during trading on Friday.

The pair had hit local highs of $35,400 overnight before abruptly reversing trajectory to fall below $33,000.

For popular trader Crypto Ed, the situation was similar to events last month after BTC/USD first bounced at $30,000 support.

“Current, sluggish PA reminds me of a similar situation a few weeks ago….. I thought we did a 1-5 and started next cycle but after 1 more top, BTC made a deeper correction,” he commented on an accompanying chart.

“Thinking we might get the same here.”

BTC/USD scenario. Source: Crypto Ed/ Twitter

That would place Bitcoin in a position to rechallenge the $20,000 corridor which it briefly broke into several days ago.

As Cointelegraph reported, the mood among many traders remains skewed to the cautious side after BTC/USD failed to reach a $37,000 target before its latest rejection. The possibility of a new lower low is thus far from off the cards.

BTC buy interest remains

Signs of underlying confidence nonetheless remain.

Related: Bulls on parade: Galaxy Digital and Alameda pundits tip market recovery

On Friday, it was again El Salvador and its Bitcoin law in the spotlight after president Nayib Bukele announced that every eligible citizen would receive $30 free in BTC for downloading its wallet.

Institutional bullishness meanwhile came in the form of the Purpose Bitcoin ETF, which continued to add to its assets under management throughout the price dip.

Meanwhile, altcoins were flat, with no single asset managing to break out of established trading zones.