Bitcoin price on a tear higher after it managed to push above the horizontal resistance given by an ascending triangle. The measured move points to $14,000, with a decent risk-reward ratio of 1:2.
Bitcoin and other cryptocurrencies have recently benefited from renewed attention from investors. During the coronavirus pandemic, the stock market stole the thunder from the crypto market – its volatility exceeded the one seen in cryptos.
However, more and more investors consider Bitcoin as protection against inflation. In other words, an alternative investment. As such, having a percentage of the portfolio in Bitcoin makes sense from a long-term investor looking for diversification benefits.
Bitcoin and Gold – A Tight Correlation
Bitcoin as an alternative investment, also poses challenges to investors. For instance, if you have to choose between Bitcoin and gold, what would you do? They both offer protection against inflation and have a direct correlation.
With the exception of weekends, Bitcoin price and gold have literally identical swings. If that is the case, it means that investors should cut the gold exposure and use the proceeds for building a Bitcoin position. This way, too much exposure to alternative investments is avoided.
Bitcoin Price Technical Analysis
An ascending triangle offers horizontal resistance. In this case, the $12,000 acted as a resistance. As it Is often the case, resistance turns into support. Therefore, we should not exclude a retest of the upper edge of the triangle.
But the last higher low should hold on any attempt of reversal, and a sustained trend to $14,000 should follow. To make the most of it, go long while the Bitcoin price remains above the ascending triangle’s horizontal resistance. Next, place a stop-loss order at $11,750. Finally, target the $14,000 and even consider trailing the stop-loss if and when the price reaches that level. The reason for that comes from the fact that the ascending triangle typically forms during strong trends, so more upside potential for the Bitcoin price should not be discounted.
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Bitcoin Price Forecast
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