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Bitcoin Pointing to a Return to $14,000 on Paypal News!

Bitcoin
10/21/2020

The cryptocurrency market, mainly the major coins, have been really frustrating to trade in these past few weeks. Cryptocurrencies tend to adhere to technicals much better and smoothly, hence why the sector attracts many pure technical traders. Plus the fact that many crypto traders believe Wall Street and their games has not yet reached the crypto markets…but that is a highly debatable topic. Bitcoin still continues to be the leader in many instances, but we have seen many breakouts failing leading to frustrated traders as mentioned previously. This is beginning to change.

I have mentioned previous breakouts over on our Equity Guru Discord Trading Channels. There is one specifically on cryptocurrencies. The arrows on my chart above point to breakout levels that I have called out for our members. The initial break above 10,300 was big. I mean really big. It gave us a confirmed trend transition. Many traders got shaken out when price popped and then dropped hard back down to this level. To me, this was just normal and expected market structure. Price tends to retest previous breakout zones as support (or resistance in a downtrend).

The next breakout zone was when price climbed back above 11,200. As you can see, once we retested major support at 10,300, price began to range and it took a few weeks for it to get moving again. Once again, some really frustrated crypto traders. But getting back above 11,200 meant that price closed back above an interim flip zone (area where price has been both support and resistance). Finally, I mentioned the break above 11,600, which was meant for those who missed the 11,200 breakout. As you can see, price once again retraced to test 11,200 as support before climbing higher. The break above 11,600 was a breakout trigger after a successful retest of support.

This leads us to today’s candle. Price is testing another resistance zone here at 12,400. At time of writing, we are already at 12,700! What we would like to see would be a daily candle close above this zone. This confirms the breakout. After that, we either retrace to retest the breakout as support, or price momentum is too strong and we go directly to the next major resistance around 14,000.

Looking good currently with Bitcoin above 7%, but there are many instances where price sells off and we fail the breakout attempt, so be patient.

In terms of news, there has actually been some major developments. Firstly, we heard Square disclose that they have bought $50 million worth of Bitcoin.

“Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose,” the company said in a release.

More big news out today. It has come out that Paypal will be allowing customers to buy cryptocurrencies and use them for payments! The Paypal wallet will accept and allow one to trade Bitcoin, Ethereum, Litecoin and Bitcoin Cash. The wallet will be rolled out in the upcoming weeks, with early next year being the target for allowing customers to use cryptocurrencies to pay for goods and services.

To those who are bullish on cryptocurrencies, this is music to their ears. Bitcoin now has a function. It can be used as money and will be accepted as money by a large worldwide online payments system in Paypal.

Longtime readers know my take on cryptos. I am bullish because they are a way to get out of fiat currency. The signs of a currency war and the eventual fiat crisis is beginning. The Americans seem to be weakening the Dollar to combat the Chinese. With the weaker Dollar, it means the Euro, the Loonie and other currencies strengthen. This is not what nations who are trying to recover want. They want a weaker currency. The European Central Bank has already come out saying they are watching the Euro closely, because they would like it weaker for inflation and for boosting exports. A very high probability that the ECB intervenes to try to weaken their currency. This is the currency war, and why I believe you should be in precious metals and crypto’s as a way out of fiat.

The other major trend, which I am not too excited about, is a national digital currency. More central banks are coming out discussing digital currency as it would make the speed of transfers much quicker. In fact, the Bank of Canada put out a report regarding central banks and the Bank of International Settlements laying out key requirements for a digital currency. It is coming because it is a great way to track and tax ALL money flows. Government sees this as a must as it needs to collect more tax revenue to pay for all these Covid programs.

One thing most people do not know about is that this digital currency is coming much quicker than anticipated. If you google the “banking for all” act, you will come by this legislation on the US congress site pointing to digital currency before mid January 2021. Decentralized cryptos look like a safe haven in this type of world, however we cannot underestimate the power central banks and governments have. They can simply make it illegal to own any decentralized cryptos, and most people would obey and sell their stake.

Before we end, I want to leave you with two more crypto charts:

The Ethereum chart looks more attractive than Bitcoin because it still has not broken out! As you can see, we are testing the resistance zone right now. This is a major flip zone, almost akin to Bitcoin at 11,200. A breakout here can take Ethereum to 500, and then 600 would be the next major resistance zone.

Ripple seems to divide the cryptocurrency community a lot, but let’s stick with the chart rather than talking about it being the bankers coin. Very nice chart. Similar to Ethereum in that is has yet to break out. 0.26 is the key zone. A close above would take us to 0.33 and then 0.40.

 

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