Bitcoin rallied on Tuesday, initially falling to just over the $22,000 level before finding support and turning around to form a nice-looking hammer on the daily chart. This comes after a pretty far-reaching Doji candle, a green one at that, so this is encouraging that BTC is not quite ready to reverse here. Today marks Bitcoin's 7th consecutive green candle, so we are very bullish once again, so I think the question is whether or not this is leading up to another breakout higher or a reversal back down.
For now, I think it's insane to bet against Bitcoin when it's trending, especially when the trend is higher. It's just too easy to get your face ripped off and blow up your account. Even when Bitcoin looks like it's getting a bit overextended or frothy, I don't think that justifies shorting, or possibly even selling if you have a longer time horizon. That being said, I think we're at the early stages of a longer-term bull market that could last for years, so I think selling now is risky in that it better be a high probability scalp to accumulate more BTC or at a lower cost basis. Otherwise, I think adding on pullbacks is the way to go.
For now, I think BTC probably finds resistance around $25K or maybe $30K if it really gets going in the short-term. We are a bit overextended but there's simply too much demand and supply constraints to justify a major price correction less a black swan. If/when Bitcoin does pull back, I'll be looking for a pullback to $20K or possibly a bit lower which would not likely last long.
In traditional markets, equities are still fluttering around ATHs but have experienced a bit of volatility in the past few trading days, possibly indicating a topping pattern. Gold recently rallied back above the $1,900 level before pulling back a bit, selling off nearly $60 in the last 24 hours. Meanwhile, the US Dollar recently put in a 2.5 year low, which further validated its negative covariance to Bitcoin, which has recently surged and broken through its previous ATH to rally another 20% thereafter. Bitcoin fund issuer Grayscale announced they have to pause 6 of their most popular crypto-backed funds popular among traditional investors, Bitcoin first and foremost, due too demand exceeding Grayscale's ability to buy and custody enough actual Bitcoin. Inference: Bitcoin demand is high and growing higher, and supply is low and getting lower. Dips are buying opportunities; accumulate is the name of the game.
Support: Look for support at the $20K level which is resistance turned support and a large, round psychological number. I think there is and will be FOMO to buy BTC under $20K (can you believe we're saying this already?), so I think a dip to $17K - $18K will quickly be bought up, which lines up with the 61.8% or 78.6% Fibonacci retracement levels.
Resistance: We're in uncharted waters here, but I think now that BTC is well into the five figures, it'll move in either $2,000 or $5,000 increments. Accordingly, my target is $25,000 which is a nice large, round psychological number, or possibly $30,000. From there, we'll look for exhaustive candles indicating Bitcoin is running out of steam and then look for support levels to target for dips to buy. Bitcoin's going higher - no sense in trying to fight this trend.
About Us:
If you enjoy these posts, please support the channel by "Tipping" this post below, or using either of these referral links below.
Buy Bitcoin here.
Earn Crypto here.
