Bitcoin has rallied slightly during early trading on Friday, as we continue to show signs of life. As you can see on the chart I have drawn a trend line underneath, and it now looks as if we are trying to form some type of channel again. We are obviously in and uptrend, and even though we have pulled back recently, I have been telling you that it could be a nice buying opportunity.
Friday session
So far, the Friday session has been somewhat bullish, reaching towards the $8000 level again. Over the weekend, we will probably see bullish action as well, and as a result it’s very possible that we could come back to our trading desk on Monday and see this market closer to $9000. However, when you look at the downside, if we were to break this slight uptrend line we will more than likely go looking at $7000. In other words, we are essentially in a $2000 range but most certainly with a bit of an upward bias.
BTC/USD
Potential targets and levels
If we were to break down below the $7000 level, it’s very likely that the 50 day EMA could offer support, which is closer to the $6600 level. Below there, I think the absolute “floor” in the market is closer to the $6000 level. As long as we can stay above there I feel that the market is very likely to continue to find buyers. Ultimately though, the one thing we can probably count on is a bit of volatility. I believe that the market is still trying to go to the $10,000 level above, as it is a large, round, psychologically significant figure and of course an area that has been important in the past. At that point, it’s very likely that we would see major resistance, but that doesn’t necessarily mean that it would be the end of the uptrend, rather a nice round figure for larger traders to take profits.
The main take away
The main take away with Bitcoin is that we are in and uptrend, we have been grinding quite a bit higher over the last several weeks, and after we broke above the $5000 level it’s obvious that the market is trying to form a new longer-term uptrend. Bitcoin had been beaten down so much over the last couple of years that we simply ran out of downward momentum.
There’s also a lot of questions as to whether or not Third World citizens aren’t putting money into the crypto as the global economy starts to fall apart. In a strange sense, it’s possible that crypto is going to become almost like an international bond market, where people throw money into it as a way to avoid more traditional volatility based markets.
At the end of the day, short-term pullbacks offer value and have for a couple of months. This is a market that continues to show that attitude, so it really doesn’t matter why we are going higher, just that you recognize that we are.
