Trading Bitcoin: Bulls Face Resistance at $8.4k

4 Hour

On the 4 hour chart above, Bitcoin recently topped on a green 9. Currently, the trend is in the process of creating a red 1 candle. After breaking out of the descending parallel channel, look for price to consolidate above the purple line.

Weekly

Bitcoin’s current weekly candle is a bullish engulfing candle. In technical analysis, the majority of a price move will typically come in the form of an engulfing candle. Notice how the engulfing red 1 candle during November 2019 encapsulated the entire downward move. Typically after an engulfing candle occurs, a small pullback will occur at some point shortly after. Understand that this does not mean the candle has to close below the previous engulfing candle. But due to the immense buying pressure throughout the week, next week’s candle may pullback temporarily to test the $8k support level before pushing higher.

Conclusion

Price is pulling back today after a nice rally this week. Many have speculated that Bitcoin has increased this week as a result of the global tensions between the United States and Iran. At 11AM central time, President Trump will make an announcement addressing Iran’s recent retaliation. While there were no American casualties as a result of the attack, markets react adversely to war and political uncertainty. Trump’s announcement is expected to have a large impact on the US equity market. Therefore, this announcement is likely to have an effect on Bitcoin. After tensions between the US and Iran arose, Bitcoin, Gold, and Oil spiked over 5%, further adding to the concept of Bitcoin as a safe haven asset. Overall, there are many obstacles Bitcoin will face in 2020. Above all, we are still expecting 2020 and 2021 to be big years for Bitcoin.