Bitcoin Price Prediction: $14,000 Surge Expected Based On Fibonacci ‘Golden Ratio’

With Bitcoin firmly above the resistance level of $12,000, analysts are expecting further upside to $14,000 if the price follows the Fibonacci "Golden Ratio".

Bitcoin increased as much as 11% Wednesday from $11,916 to $13,250 before closing at $12,806 upon PayPal's announcement that it will soon allow users to buy and sell cryptocurrency within its platform in the future. The psychological resistance at $12,000 was broken in one day with a convincing volume.

The Fibonacci retracement tool is used by traders to identify key support and resistance levels that the market would encounter during a major price run. It focuses on the 23.6%, 38.2%, 50% and 61.8% of a price move. These percentages are based on the golden ratio, a predictable pattern that is observed not just in finance but in other areas as well.

Katie Stockton, the founder of financial firm Fairlead Strategies, said Bitcoin gained short-term price momentum after testing and convincingly escaping the $10,000 barrier in early September.

When Bitcoin hit $12,000 last July, Stockton projected $14,000 as the next key resistance, which was in line with a retracement level based on the Fibonacci Golden Ratio. Now that $12,000 is breached, the analyst predicts $14,000 is likely ahead because the current uptrend is supported by long-term momentum. "There is also room to overbought territory based on the weekly stochastic," she told Business Insider.

Despite a string of positive and negative news these past few months, Bitcoin held the line between $10,000 and $11,500. Analysts and traders will be carefully observing how Bitcoin will behave above $12,000, primarily because the benchmark cryptocurrency has not been above this level for most of its 11-year existence.

According to NewsBTC.com, if Bitcoin stays around $12,500, the next key resistance is at $13,250. However, failing to defend $12,500 can put Bitcoin back to $12,000.