BTC $20,000 this week or correction?
Key takeaways: Bitcoin is on the way to the all-time high, as it breaks above $18,000 again. Is it ready to break the record or it is time for correction?
Bitcoin price is heading towards the previous all-time high price, as it broke above $18,300 this morning. BTC started its bullrun an the beginning of September and has since risen over 80%, which is less than in 3 months. There is currently a lot of speculation going on on the market about bitcoin reaching $20,000, some say this week, some say it’s time for correction. After having 5 consecutive days with green candles and Relative Strength Index being in the overbought territory for over a month, it is reasonable to expect a set back in the near future. As the volatility increased the trading volume picked up as well.
Looking at the weekly chart, we can see that everytime bitcoin price deviates too far from the EMA ribbon is when a massive correction comes. This is what happened in December 2017, July 2019 and now again, Bitcoin is on a parabolic run to the upside way above the EMA ribbon. So, for now $18,500 level remains the biggest resistance level before reaching the 2017 all-time high price. In case of a correction, the nearest support level lies at $17,200 or even further to 78,6% on Fibonacci Retracement, which is at $16,000.
Meanwhile, we might want to pay close attention to Ether, as it nears the $500 mark, yet it is way too far from it's all time high price at $1400. Also, unlike bitcoin, ether’s path to the upside has been more gradual, with smaller corrections. At the same time it has reached about 50% in growth. Despite that the Relative Strength Index has not yet reached an overbought territory.
Besides, the Ethereum fundamentals are also getting strong. The total number of addresses holding over 1 ETH has hit an all-time high surpassing the previous levels of September this year. Moreover, the top 10 decentralized applications on the ethereum blockchain have reached over a million daily active users on average over the past month. However, we gotta keep an eye on a bearish divergence on a daily RSI and if bitcoin goes down correcting heavily, the chances are high that Ether will follow.