Bottom line: Bitcoin long term outlook continues to remain bullish against 3850 lows. In the short term though, bears are looking to push prices lower towards 6300/6400 zone, to find support.
Fundamental Outlook:
Dow Jones, along with other benchmark indices have rallied for two consecutive days now. The Dow has added 3.0%, over the last two sessions closing around 25800 mark yesterday. Is it time to get optimistic yet? The answer might be NO, as fundamental story remains unchanged.
COVID-19 infections are rising in the US (over 80K yesterday) and other developing countries. The optimism over COVID-19 drug Remdesivir might fade away soon as the cost of treatment might be around USD 2340.00, which is affordable only by the developed countries.
US-China tensions have risen further after China officially passed the Hong Kong national security law. Other Geo-political issues include the continued face off between India and China over Line of actual control in Ladakh.
AUDUSD rose over +0.5% yesterday and managed to close higher at 0.6900. The exchange rate is seen to be trading below its June top at 0.7064. It is expected to come under renewed selling pressure over the next few weeks, as fears of risk aversion looms.
Technical Analysis:
Bitcoin has remained in control of bulls since 3850 lows, and they have managed to take out resistance around 10500 levels. Ideally, a corrective drop should be on its way towards 6300/6400 levels, before the rally resumes further.
Bitcoin has rallied from 3850 through 10500 levels in the past 13 weeks. The fibonacci 0.618 retracement of the above rally is also passing through 6370 levels. Hence, probability for a bullish bounce remains high if prices manage to reach there.
Most traders might have taken profits around 9500-10000 levels, on longs initiated earlier. They might remain flat for a while and consider initiating fresh long positions around 6300/6400 levels, going forward.
Prepared by
Harsh Japee, Technical Analyst.
Bitcoin Chart
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