Bitcoin exploded higher on Monday to kick off the week, thrusting higher overnight through the $40K level and even the standing $42K ATH on the news of Tesla's buying of $1.5 billion of Bitcoin and the company starting to accept Bitcoin as payment. This is a tremendously bullish candle as Bitcoin breaks through a resistance level to confirm a resumption of the uptrend and printing a new ATH over $46K before closing the daily candle near the highs. Bitcoin's back.
(February 8, 2021 7:30PM EST)
Outlook:
Bitcoin soared on Monday, smashing through resistance levels and the standing ATH to run to higher levels, even breaking above $45K and closing north of $46K. Bitcoin has broken out and is obviously moving higher, as this bullish engulfing candle in the breaking of resistance suggests the buyers are full well in control and sentiment is extremely positive, indicating a sustained push higher has begun. Near-term I think $50K is Bitcoin's initial price target as it's a large, round psychological number -- exactly halfway to $100,000 per Bitcoin, but technically it is otherwise relatively insignificant. That's not to say we should underestimate the power of market psychology even in the slightest. However, given the magnitude of this news, implications, and reactive price action, I could easily see Bitcoin extending up to $60,000 before experiencing any significant pullback.
This would also coalesce well with Bitcoin eclipsing the $1 trillion market cap, a level which would be attained with a Bitcoin price of roughly $53,700. I think this is possible as an overextension on exuberance from reaching such a monumental asset class valuation and lead to a blowoff top up to $55K - $60K before ultimately concluding the peak of this impulsive wave.
It appears outspoken MicroStrategy CEO and Bitcoin proponent Michael Saylor's 2-day video conference for institutional investors and execs at public companies re: Bitcoin sparked a fire with Musk, either that or the Gamestop vs. Wall Street battle, but either way, Elon Musk's Bitcoin bullishness and Tesla's record-setting Bitcoin balance sheet purchase and Tesla's adoption of the currency is possibly the biggest Bitcoin news since PayPal enabling its 300 million global users to buy crypto at the press of a button. We are starting to see the dominoes fall as huge multinational public companies and figureheads getting on board and fully embracing the wonder that is Bitcoin and crypto. With heavyweights such as Paul Tudor Jones, Jack Dorsey, Elon Musk, Mark Cuban, and more joining the movement, it's only a matter of time (not long) for others to cave and start adding nine to 10 figure Bitcoin purchases around.
In traditional markets, gold continued its recovery today, rising back above the $1,830 level to finish the day up over 20 pts, recovering much of last week's drop below $1,800. This comes alongside Bitcoin's rally but also among a bearish day for the US dollar which initially rallied but quickly turned around and gave back all of the gains, closing near the low of the session. Both of these covariance and negative covariances are bullish for Bitcoin.
Support: Look for support at the $30K which is now supported by the 50 Day EMA and what looks like our bottom at this point. If Bitcoin continues grinding higher or even sideways, I might make a case for $35K as near-term support.
Resistance: Look for resistance at $40K, which we'll probably need to retest a couple of times before heading higher. After that, look for resistance around $50K, then $55K which roughly equates to a $1 trillion market cap for Bitcoin, then every $10K until $100K. Make no mistake; we're going higher, it's just a matter of when.
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