Will Bitcoin’s rally be over?

By: Aldo

Throughout the year Bitcoin tried to consolidate itself as an important store of value within the market, proving itself by attracting the attention of highly prestigious financial and technology companies; so far it has managed to increase up to 182% despite multiple collapses within one of the worst recessions in history due to the coronavirus pandemic, showing better performance, even better than that of gold, which has increased only by more than 22% in all of 2020, suffering a 1% drop that has led investors to withdraw money from their exchange-traded funds.

Something that manages to characterize Bitcoin is that within the market it has developed in an intensely cyclical way since only in a few years the price has managed to rise to an all-time high before falling abruptly; However, each year it has shown an increase compared to the previous one, leaving investors who chose to rely on the now “digital gold” when it started and who have remained very satisfied they have managed to enjoy its immense profits steadily.

For a week, Bitcoin managed to surpass $20,000 reaching new historical highs, and is currently trading above $21,000, being an important fact for the cryptocurrency number with the highest value in the market, surpassing the previous maximum price of the day Dec. 1 at $19,920. The current price of Bitcoin is up 8.85%, trading at $ 21,123. This increase in the value of Bitcoin has been brewing for some time, due to the fact that it has been multiplying in the last three months, while other cryptocurrencies such as Ethereum, Litecoin, and XRP are below 58% to 88% from their highs reached 3 years ago.

Some of the reasons why this historic rebound has been allowed could be linked so much to the fact that the cryptocurrency created in 2008 has since been considered with an interest that lies in its own decentralization since it does not depend on any institution, but also due to the recent and strong launch of a cryptocurrency purchase, sale and payment service in collaboration with one of the largest payment companies such as PayPal, this alliance managed on October 21 has increased its value by 40%.

Once again, in the face of a strong season of the financial crisis, cryptocurrencies have demonstrated their various uses and benefits within the sector, which is very positive and that over time will continue to show this perspective, although falls and volatility are inevitable within the market. Investment funds in this type of service for individuals tend to be characterized by price movements that are usually abrupt.

Bitcoin has left the all-time high at 24,098; it is currently at the price of 23,700 and the price left a Hanging-man candle on W1.

Last week, the price has left a bearish engulfing candle in H1 that would potentially give rise to the formation of a Head and Shoulder pattern and thus form the Evening star, if so, the pattern has a clavicle in the support formed by the range of the 31.8% Fib at 22,270.78 and the psychological level of 22,500. If it manages to break the support, the price would break the 22k, the 80-period MA in H1 at 23,087, making its way to the target below the range that forms the 61.8% Fibo support at 21,141.93 and the psychological level of 21k being within the range the 200-period SMA in 1H with the target of the pattern at 20,670.51. If it continues, the next support is seen at the Fibo 78.6%-88.6% range at 19,860.01-20,338.34 without forgetting that within it is the important psychological level of 20k.

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