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A short-term slipover in recent sessions has not refrained Bitcoin from eyeing $20,000 by the end of this year.
Independent financial analysis firm TradingShot wrote in its recent analysis that it sees the cryptocurrency recovering its all-time high in 2020. The agency cited two technical setups that have dictated the Bitcoin price behavior in the last 1.5 years, adding that their validation for the rest of this year could push the cryptocurrency towards $20,000.
Bitcoin Confluence
The first of these technical indicators is a Hyperbola – a long arc that has acted as Bitcoin’s resistance since June 2019. This year, the cryptocurrency repeatedly tried to break above the curvy structure, with the latest attempt going as back as November 5, 2020.
Meanwhile, the Hyperbola resistance received additional strength from Pitchfork, the second technical indicator containing a string of Fibonacci levels acting as supports and resistances during Bitcoin’s uptrend. The chart below shows the two setups operating in unison.
Bitcoin long-term setup, as presented by TradingShot. Source: BTCUSD on TradingView.com
The chart structure above illustrates a sequence of identical fractals inside the Pitchfork setup. The technical indicator projects diagonal Fibonacci levels, made from the swing high of $13,880 to the swing low of $3,850. These levels have dictated Bitcoin’s medium-term supports and resistances while keeping the cryptocurrency en route to testing the Hyperbola resistance.
TradingShot offered a trading setup:
“Every contact with that Hyperbola (even the marginal miss) ended up with a pull-back that ranges from the 0.236 Fib to as low as 0.618 Fib (not counting the March 07 – 12 COVID meltdown which is non-technical). The trend-line we need to keep an eye on is the 40° angle from each bottom.”
‘When this breaks, the price pulls back. This can take place above the Hyperbola and the 0.236 Pitchfork Fib, so be ready to apply it,’ he added.
Topping at $20K
The parabola-pitchfork combo anticipates that Bitcoin could go a short-term correction from levels above $15,000 to as low as $12,100 (the 0.618 Fib level). But from there, the cryptocurrency could again pursue an uptrend while maintaining its price floor above the “40° trendline.”
The bullish momentum – again – expects to get exhausted near the parabola. Only this time, the curve is sitting near the $20,000-level.
TradingShot raised his bullish outlook of Bitcoin, also based on the reading of its Relative Strength Indicator. The price-momentum indicator makes higher highs whenever Bitcoin touches the 0.236 Fib level.
“[We] get the impression that if the 0.236 Fib breaks, the RSI has enough strength to allow a move to the ATH ($20,000) before the start of 2021.”
Bitcoin was trading near $15,500 at the time of this writing.
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