Bitcoin price back higher as it threatens to break above $12,000 again. However, a head and shoulders pattern keeps bulls away for the moment. Hence, the horizontal resistance might provide an opportunity to go short for the pattern’s measured move.
Two things do not bode well for Bitcoin. One is that since its inception, it has been presented as protection against inflation. All research papers that one may read about Bitcoin and why you should invest in it is because it cannot lose its value. Also, because so far it followed the halving process and reach the subsequent targets, Bitcoin bulls keep hoping it will reach minimum $20,000 and maximum $50,000 by December 2020. At least, this is the band Bitcoin price evolves into, as suggested by the halving process.
Now, we’re already in September. A move to $20,000 and beyond is almost 100% from the current levels. For the rest, you do the math.
Another thing is that Bitcoin trades very correlated to gold. At least it did so all this pandemic so far. But if Bitcoin price is supposed to follow the projected pace, what happens to gold? The correlation, in this case, will break.
But if Bitcoin is supposed to offer protection against inflation, just like gold does – why do we need them both? And why would the correlation break? Unless you think gold will reach minimum $4,000 by the end of 2020, the Bitcoin price higher thesis based on protection against inflation has some flows.
Bitcoin Price Technical Analysis
Bitcoin consolidation continues. For over one month, it hovers around $12,000 with not much conviction to break higher. A move lower below the dynamic support opens the gates for continuation towards the $10,000 and below. To trade it, wait for the Bitcoin price to break $11,250 to the downside, place a stop-loss at $12,500, and target $9,000 and below.