Bitcoin looks ready to go higher
Bitcoin traders have seen a hammer form for the trading session on Tuesday, to be followed by a move to the upside on Wednesday, a very strong signal that we are going to go higher again. After all, this is a pair that the buyers are in control of, and now it looks as if we are forming a bit of a bullish flag, or at the very least a falling wedge, both of which would be bullish signs.
The importance of $10,000
The importance of $10,000 can’t be overlooked. After all, it is a large, round, psychologically significant figure, which of course will attract a lot of institutional money. The fact that we formed a hammer during the trading session on Tuesday at that level suggests that there is a bit of a “floor” in this area. At this point, we could also point out the fact that it is the top of the channel that we have been in previously, so as it was resistance, it should now be supported.
The $10,000 could be a bit of a launching point to reach towards the $14,000 level. The fact that suddenly we were seeing news outlets talking about the demise of bitcoin as we sliced through the $10,000 level during the trading session on Tuesday could have been your reversal signal.
Moving averages of course rallied to the upside over the last several weeks and the 50 day moving average is starting to go into a bit of a bigger move to the upside. At this point, the market is obviously bullish and I think that a lot of people are trying to catch up to the momentum that we have seen. The $14,000 level above is major resistance, but quite frankly I think we will eventually get above there. This is starting to look a lot like 2016, maybe 2017, meaning that we should rally hard but I also think that given enough time we could be looking at a lot of trouble.
The main take away
The main take away for the market is that we obviously have a lot of support just underneath, and it makes quite a bit of sense that we could see buyers step in and trying to push to the upside. The fact that we are heading into the Independence Day holiday could also make the markets a little bit more thin than usual, and that gives us an opportunity to see the market go higher rather quickly on erratic moves.
That being said, if we were to break down below the hammer from the Tuesday session, then we will probably go looking towards the 50 day EMA underneath that is currently sitting right around the $8500 level. Ultimately, this is a bullish market and should not be sold. The fact that we have rallied rather hard and caught everybody’s attention should be impulsive given enough time. However, this is a very small market so if we go parabolic again it’s going to be an opportunity to short just like there was a couple of years ago.