Bitcoin Price
The Best Place to Short Bitcoin is Above $14K, Analyst Explains Why
Yashu Gola | Oct 23, 2020 | 08:01
Bitcoin bulls will enjoy domination over the market until its price breaches the $14,000-mark, according to Eugene Loza of EXCAVO.
The independent market analyst wrote in his note to investors that he expects to see traders with more exposure in Long trades than the Short ones. He signified his prediction with a technical structure. It envisioned BTC/USD inside an Ascending Channel pattern, inching upward as it awaits to test a sequence of Fibonacci resistance and support levels.
Bitcoin trade setup, as presented by Eugene Loza. Source: BTCUSD on TradingView.com
The smaller Fibonacci retracement graph in the chart above expired at $12,283 after Bitcoin breached the level on Wednesday. Simultaneously, the cryptocurrency closed in towards the 61.8% level – at $13,037 – of the bigger Fib setup, awaiting a breakout move to the upside.
An $11K Bitcoin Possible
Mr. Loza supported the outlook of an extended bullish move, noting that $13,037 is “not the best place for a short [position].” He added that those who are still trading against Bitcoin’s upside outlook would risk getting liquidated at around $13,350 at a loss.
That would leave Bitcoin with the possibilities of moving further higher towards the 78.6% level of the big Fib. That is around $15,728.
Mr. Loza said that opening a short position anywhere between $14,000 and $15,728 is a “better” call. The range also lies near the upper trendline of the Ascending Channel pattern.
“Once we take the target, there is a possibility of correction to the middle line of the ascending channel,” Mr. Loza added.
The mid-level is below $11,000.
More Downside Outlooks
Mr. Loza’s statements came amid a period of strong buying enthusiasm for Bitcoin. The cryptocurrency this week gained global recognition after PayPal, the world’s leading payments service company, announced to integrate it in its existing line of products.
Before PayPal, its top rival Square, a firm headed by Twitter CEO Jack Dorsey, had shown $50 million worth of BTC in its balance sheets. Another recognized corporation, MicroStrategy, also reallocated $425 million of its cash reserve to Bitcoin, citing its fears of US dollar devaluation amid rising M2 and ultralow interest rates.
Traders assessed the sequence of events as validation of Bitcoin’s growth among prominent firms, both as a service and a financial asset. As a result, the Long positions on BTC/USD jumped dramatically higher than the Short ones, validating that the majority believes Bitcoin is underpriced at current rates.
Michaël van de Poppe, another independent market analyst, showed caution towards overly bullish statements. He said Bitcoin should hold the $12,750-12,800 range to sustain its upside bias. Otherwise, the cryptocurrency risks plunging “towards $12,200 and potentially $11,900.”
Bitcoin trade setup, as presented by Michaël van de Poppe. Source: BTCUSD on TradingView.com
Mr. Poppe’s medium-term outlook, at the same time, projected an upside continuation towards $14,000. He nevertheless reiterated that “the area between $11,200-11,700” would serve as support.
“In the worst-case scenario around $10,000, but everything is clear and good here,” he added. “Breaking $13,600 area and I think $16,000 is next.”
That somewhat rhymed with Mr. Loza’s prediction of the cryptocurrency.
