• Bitcoin price enjoys a positive fundamental environment as the uncertainty recedes.
  • Technical and on-chain metrics imply that BTC may retreat to $12,500 before another bullish wave.

Bitcoin has lived through the best week since February 2018. The pioneer digital currency price gained over $2,000 in less than seven days. The bullish momentum allowed it to reach a new multi-year high of nearly $18,800, marking November 2020 one of the strongest bullish months ever. 

The fundamentals remain positive

From a fundamental point of view, Bitcoin was influenced by the same old stories like institutional investments, inflation hedge, and a store of value in the view of the imminent fiat collapse. Also, now that the US presidential elections are behind, the level of market uncertainties decreased, making Bitcoin and other risky assets more attractive again. 

Meanwhile, sustainable price growth resulted in increased bullish forecasts from reputable investors and large banks. For instance, a senior executive at US-based financial giant Citibank, Tom Fitzpatrick, mentioned that Bitcoin's price could surpass $318,000 because it will become a digital version of gold.  

While the forecast might seem a bit far-fetched as it implies more than a 1,500% price increase for BTC, some on-chain metrics support this thesis. Moreover, the fact that traditional finance experts now share positive views can be regarded as a strong bullish signal itself.

The regulatory climate is also softening. Even US authorities are more friendly towards digital assets. The Securities and Exchange Commission's (SEC) outgoing chairman, Jay Clayton, recently admitted that Bitcoin works as a store of value and a payment mechanism. Basically, he endorsed the flagship cryptocurrency as a new form of money and confirmed that it was not a security.

Notably, the SEC has been hunting various blockchain startups that might have sold unregistered securities disguised as an initial coin offering (ICO). The regulator took action against several projects, ordering them to return the collected funds to ICO investors and pay hefty fines. This regulatory scrutiny even encouraged San-Francisco-based Ripple to ponder over moving its headquarters to a more friendly jurisdiction.

Everything that goes up must come down

Bitcoin's long-term technical indicators and on-chain metrics paint a bit less rosy picture. The bellwether cryptocurrency is grossly overbought and vulnerable to a steep correction. The TD Sequential indicator has been sending warnings to the market since the middle of the week, while the intraday charts imply that Bitcoin price has reached a local top for now.

Indeed, the TD setup presented green nine candlesticks on the 12-hour and daily chart, which are considered sell signals. If these bearish formations are confirmed, Bitcoin price may be forced to retrace for one to four daily candlesticks aiming for $16,500 as the primary target.

Bitcoin's TD Sequential Indicator, multiple charts

Bitcoin's TD Sequential Indicator on Multiple Timeframes

The weekly and monthly charts are on green eight candlesticks, which is a precursor of a sell signal, produced by a green nine candlestick. A spike in selling pressure around the current levels could see Bitcoin price retreat to $12,500 before a new bullish wave starts.

As previously discussed, Bitcoin is prone to 30-40% corrections on the way to new highs. Thus, a pullback following seven weeks of upside momentum can be seen as healthy. It will allow sidelined investors to re-enter the market and a new influx of capital may propel BTC to new all-time highs.

Bitcoin Forecast Pool

Bitcoin Forecast Poll

Regardless, FXStreet's Bitcoin Forecast Poll shows an improvement from the previous week as the expectations on all timeframes turned bullish. Notably, the price predictions imply that the participants bet on Bitcoin's growth above $17,000 on a monthly basis with the following correction towards $16,000.


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended Content

Editors’ Picks

US presidential election outcome could shape the future of crypto

US presidential election outcome could shape the future of crypto

US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).

More Cryptocurrencies News
Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.

More Bitcoin News
XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand

XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand

Ripple's XRP is trading at $0.5050 up slightly by 0.2% in the past 24 hours as it struggles to sustain a move above a key symmetry triangle resistance. Meanwhile, in its recently released Q3 report, Ripple noted the rising listing and relisting of XRP across crypto exchanges and global platforms.

More Ripple News
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. Meanwhile, the State of Michigan pension fund revealed an investment of $11 million in ETH exchange-traded funds.

More Ethereum News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP