Aside from regulatory involvement, uncertainty in other blockchains often draws demand for Bitcoin as a store of value. It did happen before and three days before Bitcoin Cash software upgrade, capital could flow into Bitcoin lifting prices above $6,600 igniting short term bulls aiming for $7,200.
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Still, Bitcoin Cash is one of the most fluid and valuable coin in the space. Though hash rates and decentralization levels pale in comparison with those of Bitcoin, it is still important to track its development. On Nov 15, a software upgrade could turn chaotic as the chain fork once more—to Bitcoin Cash SV or to Bitcoin Cash ABC. This is free cash for BCH owners and more cash for Bitcoin owners who happen to own Bitcoin Cash following last year’s fork. But on focus are expectations of higher high ahead of the fork as funds flow from BCH to Bitcoin and stable coins. In that case we expect BTC/USD to rise as it becomes a temporary store of value and a refuge against volatility.
But even if this is temporarily, it could be the sparks necessary for higher highs now that the political landscape is changing. As results began streaming in following US Mid-term elections, three pro-Crypto in Gavin Newsom, Jared Polis and Boulder would be sworn in. All are crypto friendly and progressive with Gavin Newsom representing California. Their involvement in the national stage is important and they could end push for supportive legislation as the SEC review nine different Bitcoin ETF proposals.
BTC/USD Weekly Analysis
Despite price declines in lower time frames, BTC/USD is technically bullish. It is still in green territory when we take a top-down approach. Most importantly BTC is trending above the main resistance trend line. Moving on we shall retain a BTC/USD bullish outlook suggesting buying on dips in lower time frames as long as it is trading above $6,300 or week ending Oct 21 lows.
This is so because at the moment Bitcoin is ranging and oscillating within a tight $300 range with caps at $6,800 on the upside and $6,300 on the downside. High volume moves in either direction point to underlying bullish or bearish momentum. However, considering the depth of this year’s correction, it’s likely that bulls would drive above $7,000 thanks to supportive fundamentals as Bitcoin Cash contentious hard fork.
Even if prices are ranging or printing higher, our BTC/USD trade plan anchors on how prices respond to Oct 15 high volume bull bar. Everything else constant the accumulation of prices inside that bar mean our previous forecasts is true and sooner we could see prices expanding above $6,800-$7,000 resistance zone.
But, before we suggest buys it is important for bulls to reverse recent losses and close above $6,600 and the support trend line cancelling the bear breakout of Oct 29. If not and sellers drive prices lower below $6,300 then odds of further losses below $5,800 or 2018 lows would be high. As a result, we suggest taking a neutral stand until any of our trade conditions are live.
All Charts Courtesy of Trading View