Bitcoin Weekly: The Power of Volatility

4 min readNov 9, 2020

The third highest weekly close ever, but big whales stand in the way of the king. US Equities soar on news of Covid-19 effective vaccine, while the precious metal takes a hit. Biden is poised to win the US Elections, and the markets react.

One resistance level left before entering price discovery

Big Picture

  • Bitcoin closes the week at $15,360, the third-highest weekly close.
  • Volatility is back and bitcoin is moving around $724 per day.
  • Indecision rattles the market, but volume begins to decrease.
  • Lower volume coupled with a slow-down in momentum leads to consolidation.
  • But, beware of big whales

Key Price Levels

Weekly Key Price Levels

  • Support: $13,899
  • Pivot Point: $14,812
  • Resistance: $15,407

Monthly Key Price Levels

  • Support: $12,057
  • Resistance: $15,738

Bitcoin Strolls through US Elections

Bitcoin looks strong as the price jumps to levels not seen since early 2018. The journey to the all-time high continues, but the first speed bump may be ahead. Even though a candidate has been declared, Trump is going to fight the result in the US Supreme Courts; the markets are not bearish towards Biden, but uncertainty is never good in the short-run.

Bitcoin is fragile, but higher lows and lower highs indicate a consolidation

Consequently, volatility spiked and the king is trading with an average true range of $724 per day. Now, volatility doesn’t imply steeper drops, since it’s considered to be an absolute metric. Meaning that the price will move aggressively wherever the market leads it. So, if bulls come out on top, bitcoin continues to gain and vice versa. However, it’s best to confirm any move with volume.

If On-Balance-Volume breaks below 1.683 due to lower volume, the price will follow

Bitcoin was rejected at $15,738 and the first signs of weakness put a dent in the bullish trend. Big whales, or players, are behind the recent drop because as bitcoin takes its second leg-up, the latter begin to distribute their coins to FOMO-driven investors. The price needs to stay above $15,416 if the king is to continue on its way up. If $15,416 is not flipped into support, bitcoin needs to hold above $14,812 to continue pushing towards higher highs.

What’s Next?

The price seems to have rejected 14.8k, but if bears were to make another attempt at the pivot point and the upward trend line breaks, bitcoin can tumble all the way back to $13.9k. It must be said that bitcoin’s bullish trend remains strong and momentum indicators show that bitcoin is not overbought but in the overextended market zone.

Momentum remains bullish, but bitcoin can quickly become overbought

The overextended zone is not a bearish zone because if buying pressure (On-Balance Volume above 1.683M) remains, the price will continue to push upward. It all depends on big whales not distributing their market share. Beware of bearish crossovers and the RSI dropping below 57.

Trading Strategy

This strategy bears risk, DO YOUR OWN RESEARCH

With volume decreasing and volatility spiking, expect some chop or a sideways trend for the upcoming days, if selling pressure doesn’t increase due to big whales reaping profits. Keep a close eye on the On-Balance-Volume (1.683M) because if it drops aggressively it’s probably time to sell. Do not panic sell because the price may rebound fast due to higher volatility. Wait for the rebound and set a buy (limit) order at $14,812 with a stop-loss at $14,535 (upward trendline). Only execute the trade if MACD bounces off the signal line and the RSI remains above 57. Finally, set your profit target at $15,416.




I’m Cointer a crypto enthusiast who likes to kick off the week with a weekly bitcoin analysis.