Bitcoin Weekly Forecast: BTC ready to escape from the range; bulls have $12,000 in mind


  • Bitcoin's fundamentals imply that BTC is ready for a new rally.
  • The next significant resistance is created by $12,000.
  • On-chain metrics confirm the short-term positive outlook.

Bitcoin has been gaining ground amid positive fundamental developments. The flagship cryptocurrency is ready to break free from its current range and proceed with the recovery towards $12,000. Let's have a closer look at what's going on.

Fundamentals are supportive

Square joined the ranks of large companies stacking Bitcoins. When the company bought $50 million worth of BTC as a part of its long-term vision, Bitcoin got a strong upside impulse. 

While some investors believe that the cryptocurrency industry overestimates the effect of corporates buying Bitcoin, there is no denying that the trend is positive. 

According to the popular economist and trader Alex Krueger, if the trend gains traction, banks will have to adapt their services to satisfy corporate customers' cryptocurrency needs.

The US stimulus package saga is another potentially bullish catalyst for the cryptocurrency market. US President Donald Trump confirmed that he continued negotiating the package with the Democrats adding credence to the theory that the initial refusal to discuss it until the elections were just a tactical trick. 

As FXStreet previously explained, the stimulus package is inevitable, and the Fed will continue trying to print its way out of the crisis and debasing the traditional money. Bitcoin will eventually benefit from this strategy due to the limited supply and decentralized nature.

Bitcoin's accumulation is getting trendy

Despite the slow October start, the number of BTC held on the hot wallets of the cryptocurrency exchanges has been trending down, according to the on-chain data provider CryptoQuant. When traders start taking their coins from the exchange wallets for long-term storage, it is a signal that the market sentiments are turning bullish. The crypto analyst, Willy Woo share this view:

When coins on spot exchanges drop, it's a sign that new buyers are coming in to scoop coins off the markets and moving them into cold storage HODL, we are seeing new HODLers right now. Very macro bullish.

Bitcoin's Spot Exchanges Reserve

Source: CryptoQuant

BTC/USD: The technical picture

Bitcoin (BTC) is hovering around $11,000 after a strong recovery on Thursday. The flagship cryptocurrency rebounded from the local support and retested the channel resistance amid improved market sentiments. Bitcoin's market capitalization moved above $200 billion, which is 58.4% of the total value of all digital assets in the circulation.

Bitcoin is escaping the channel

BTC/USD used the daily SMA50 as a spring-board to jump above the local channel resistance level of $10.950. If the breakthrough is confirmed, the upside momentum may gain traction and take the pioneer digital currency's price towards the next bullish target located on the approach to $12,000. This range has been limiting BTC recovery for most of 2020; now, it is considered a critical barrier that separates the coin from the new bullish cycle. 

BTC/USD daily chart

If the bulls fail to keep up the pace and let BTC return below $11,000, new highs will have to wait at least until the price retests $10,600. This local support is created by the daily SMA100 that backstopped the downside corrections since the end of April 2020. It is followed by the recent channel support on approach to $10,400 and the psychological $10,000. 

The latter limited the price recovery in May and June and flipped into support at the end of July. This area is likely to slow down the bears, however, if they manage to take it out, daily SMA200 at $9,500 will come into focus.

The upside is the path of least resistance

The on-chain metrics confirm Bitcoin's short-term bullish bias. Thus, Intotheblock's data on In and Out Market Positioning shows that there is a strong cluster of nearly 2 million addresses with over 1,4 million coins bought on approach to $10,400. Considering that they will be protecting their breakeven, BTC may find it hard to push through. 

Bitcoin's IOMP data

Source: Intotheblock

Meanwhile, there is little in terms of resistance above the current price. About 600,000 coins held on 940,00 addresses may slow down the recovery; however, this supply is likely to be absorbed by the potential demand.

To conclude: The technical indicators and on-chain data imply that Bitcoin is positioned to continue the recovery towards $12,000, provided that the daily candle closes above $11,000. Otherwise, the price may retreat towards the lower line of the current range. A sustainable move below $10,000 negates the immediate bullish forecast.

Bitcoin's poll of experts

The FXStreet Forecast Poll view on BTC/USD has somewhat improved since the previous week as expectations on weekly and monthly time frames turned bullish, while the quarterly forecast is still bearish. Now the experts believe that the risks are tilted to the downside in the long-run, though on shorter time frames an upside correction is possible. The price expectations on all time frames stay below $12,000. It means that experts bet on a price consolidation within the current ranges. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

AVAX dips below primary support, buyers worried as Avalanche could melt down to $48

AVAX price dropped as much as 17% during the Wednesday trade session. Extreme selling pressure early in the US AM trading session pushed many cryptocurrencies into massive double-digit percentage losses.

More Avax news

Tezos must hold its final support level at $5.50 or XTZ faces a capitulation move lower

Tezos price is currently trading more the 34% below the new all-time high it set on October 4th. However, despite the significant percentage drop, Tezos remains up over 200% for 2021.

More Dogecoin News

Axie Infinity faces free fall from sellers, AXS positioned for a deeper crash to $100

Axie Infinity price experienced a sharp drop in line with the rest of the cryptocurrency market. Buyers have stepped in to support Axie Infinity near the bottom of a high volume node, but a daily close below the Tenkan-Sen and Kijun-Sen could trigger some significant selling.

More Axie Infinity news

50 million merchants accept Litecoin payments driving massive spike in on-chain activity

World's largest and most well-known brands are tapping into the growing cryptocurrency market through Bitpay's partnership with Verifone. Spike in Litecoin payments is driving altcoin's on-chain activity higher. Litecoin has offered the third-highest ...

More Litecoin news

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP