The FTX contagion seems to be spreading fast among companies that have invested in FTX. President Joe Biden, came out and emphasized on the need for regulations on Bitcoin and crypto as a whole. Moreover, and rather suspiciously, JP Morgan Chase bank and other central banks have suddenly begun Pilot testing CBDCs.
Amid all these events, Bitcoin price has been slowly bleeding. This week it’s barely different.
In Last week’s analysis, we expected Bitcoin to break lower this week, lower than $15,800. And for a while there it did, before the price action suddenly bounced back up. This invalidated our downward prediction, albeit for a mere moment.
Bitcoin defied the bearish pennant and price action finally managed to paste a falling wedge pattern. Falling wedges have a 67% chance of breaking to the upside and this is exactly what bitcoin did.
Bitcoin Price Forecast
According to the chart above, BTC is taking a short term retracement toward the 20-SMA. This would put BTC at around $17,400. Should the price break above the 20-day SMA on the upside it will be bullish on the short-term. Bitcoin would then rise to meet the next possible resistance, the 50-day SMA ($18,500)
Bitcoin continues to trend below the last major support-turned-resistance. Until Bitcoin clears these areas and rises above the prolonged red zone, traders should expect a crash at any time. Moreover, there is still the potential black swan event in December that might send Bitcoin below $12,000.
Bitcoin now is retesting the upper trend line of the falling wedge before continuing higher. The next target for Bitcoin is the 200 EMA that sits at around $17,700 to $18,350. Next week might be green for Bitcoin, but the month of December will eventually end up red.
NB: The FTX hacker still has over 150,000 ETH that he is getting ready to dump on to the market. This will have some devastating effect on the price of Bitcoin and entire crypto markets.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.