Since then, Bitcoin has dropped significantly and is currently hovering at the top end of the $19,000 range, but where will it go from here?
It’s currently sat on a nice support level, and it should bounce from here and head back upwards through a nice positive trendline of higher highs.
Can We Find $20,000?
If this support level manages to stand pat, then we should see Bitcoin bounce nicely and head back on upwards, creating a new higher high at around $19,500 – possibly a little before.
Then we’ll see a brief retracement before it picks up and continues back on its path towards $20,000, but it’s not going to be a sudden and speedy push like the last push to $20,000.
This next wave of upwards momentum is going to play out more traditionally with new higher highs and higher lows thanks to the retracement.
The nice thing about this pattern is that it will cement in the gains with the retracement, making the next push up a little bit easier as the resistance has been bought up.
However, if this support doesn’t hold we will see Bitcoin fall. It should stop dropping right before it falls out of $19,000, but there’s a good chance the support at $19,000 won’t hold and it’ll be a straight drop down to $18,760.
If this happens, then it will once again be a nice time to buy in as the bullish movement is still far from over.
Our prediction of $19,000 for January 2021 still looks like it will happen, so don’t count on it hanging around below $19,000 for too long.
Don’t Forget to Set Stops
If you are going to try and trade this little dip, do make sure you’re setting your stop losses correctly.
If you aim to buy in around $19,150 and $19,322 you’ll have gotten yourself a bargain. Look to set up sell trades at any point before $19,500 and you should be able to scalp a nice bit of change.
On the other end of the trade, set up stops anywhere before $19,015 and you should be good to go.
It’s a bit of a tight stop loss if you’re buying in at the lower end of our buy-in zone, but it will cover you should the support not hold.
If you’re not confident in catching this next wave in time or about executing the trades, it might be best for you to sit out of this move.
Only trade when you feel confident and like you’re in a good position, rather than chasing losses.
If you are going to try and trade this to chase some losses, then you could end up setting your stops too low and losing even more, so be careful.
Whatever happens, it’s going to be short and sharp, so make sure your trades are in the order book rather than trying to trade this manually.
A pro will have a hard time to hit these orders manually, so do set them up ahead of time.