The Bitcoin Battle for $10K is decisive: $20K fast or a Ping-Pong 2019

20 Jun, 2019
by David Borman

With the current price of Bitcoin hovering a little above the $9,000 mark, many in the market are asking what we can expect if Bitcoin should break the highly anticipated $10,000 price point and what kind of resistance we may find between $10,000 and $20,000. Alternatively, what if Bitcoin doesn't break above $10K anytime soon? Today we'll explore both possibilities and discuss how they could play out. Let's dig in!

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Bitcoin recently got stopped out just below $9,500. The reason for resistance at this level can easily be seen with the Fibonacci retracement tool applied to the most recent market cycle.

BTC/USD Chart provided by Tradingview

Here we can see that the price is being rejected off of the resistance formed by the 0.382 retracement level, aligning almost perfectly with $9,500. Seeing as there is significant psychological resistance at $10K, this is likely forming a formidable wall for Bitcoin to push through. That being said, it is just a matter of time until we break $10,000, so what happens if we break $10,000 soon?

What happens if we break above $10K?

When Bitcoin breaks $10,000 it will likely see some serious momentum as excitement kicks in across the market. There is a good chance the sentiment will carry Bitcoin above $11,000 quickly after breaching $10K, however we can see our next Fibonacci level not far beyond that at $11,500. While passing through multiple resistances quickly is not impossible with enough FOMO in the market, there are a couple of things that give us reason to believe this level may stop out the price rise.

For one, there is some historical resistance at this level that we can see from back in February and March of 2018. This was admittedly while the market was consolidating, but it still adds some weight to the resistance level.

Another thing to be wary of, especially if Bitcoin gets above $10K soon, is that the market could be arguably moving up too quickly. Looking on the weekly, we can see that Bitcoin is not only generally rising quite swiftly, but that this has led to an RSI that is definitely in the overextended range. This doesn't mean that we can't keep climbing, but there will have to be some selloffs along the way, and these will likely occur around key resistance levels.

BTC/USD Chart provided by Tradingview

Note: These are not specific predictions but a general idea of the possible path to $20,000.

As we get closer to $20K, the previous All Time High (ATH), we may expect some more volatility in the price movements. We can see that after we break $11.5K, the next major Fibonacci level comes in at about $13.5K, followed by just over $16K. At this point the market will be getting excited and likely the general trend up will be accelerating, but don't be surprised if we see some quick swings between these levels as we pass through them. That means the market could still lose and regain thousands of dollars in just days. That being said, it is these areas of consolidation that help to build support for further pushes upward.

Once we break solid above $16K, it probably won't take long until we hit $20K. There is a real chance we could hit some resistance before pushing through $20K, but once we do the market may be headed parabolic. Generally technical analysis breaks down as prices go exponential, but it's safe to say the market should be in full FOMO mode by this point, judging by previous rallies.

What happpens if we don't break above $10K?

Another possibility is that getting above $10K isn't as close as it seems. True, we are knocking at the doorstep right now, but the market shows some signs of being overextended. A major rejection here could send the price back down to the previous fibonacci level, about $7.1K, and it could start a sideways channel of price action that continues for some time.

This is not just blind FUD however, but is related very much to what we see on an extended timeframe. For this we will zoom way out to the weekly over the last several years, and also look at the action on a logarithmic scale.

BTC/USD Chart provided by Tradingview

Here we can see the price over the last two market cycles. Notice how the price rises along the ascending trendline, only diverging away during exponential rises. At our current rate of climbing, it would seem we are beginning an exponential rise, but that would mean this cycle is playing out much quicker than the last one. If history is to generally repeat, we would expect at the very least some sideways action for much of the rest of the year, to bring us back to that trendline, at which point the price would begin rising again along that line, likely still hitting resistance at the Fibonacci levels, until we cross $20,000, at which point we would likely go exponential again.

While this outlook both fits historical data and seems like a healthier move, keep in mind that "trends are trends, until they're not." The market is much more evolved now, and there's no guarantee that we will return to this line, but it remains a distinct possibility.

Ultimately it remains to be seen what Bitcoin will do. The market is still young, and changing all the time. There seems to be quite a lot of positive sentiment out there currently, and it has carried us quite a long way rather quickly. Will the price respond more to historical action and price levels? Or will excitement and FOMO carry us to $20,000 in just months? Let us know in the comments what you think!

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