Bitcoin markets continue to show resiliency
Bitcoin markets rallied a bit during the trading session on Friday, as we continue to see a lot of bullish pressure. This is especially interesting considering that the market formed a hammer on Thursday, showing signs of strength, and it now looks as if we are ready to go and aim towards the highs again. This shows just how resilient the bitcoin market has been, which makes quite a bit of sense considering that there is a lot of fear when it comes to financial markets.
The shape of the candle is rather bullish, as we plow into the $8250 level. That is an area that has been rather resistive over the last several days, so we can break above there it’s likely that the market could go to the $10,000 level above, which is a major resistance and psychological barrier.
The overall trend
The overall trend in Bitcoin continues to show plenty of support for buying, as we had recently broken above major resistance in the form of the $6000 level, which is a very positive sign. The market had been grinding its way towards that level, and then eventually broke out with significant force. After pulling back several times, we have seen the buyers return and the $7000 level has offered enough support to keep the market afloat.
At this point in time it’s probably only a matter of time before we break out to the upside and therefore I still like the idea of buying dips. It’s not until we break down below the $6000 level that I would be concerned with the overall trend which has decidedly turned positive. However, these parabolic moves do need to be tempered, as we had seen in early 2018.
These parabolic moves to be self-defeating so hopefully the market will spend more time consolidating in this area and then grind much higher. All things being equal, that does look to be the base case scenario but a sudden pop to the upside could get people nervous again.
The overhead resistance that we are looking at is just the beginning of a series of hurdles I see going higher. Remember, there were a lot of people out there they got into Bitcoin at much higher levels, and a lot of them would be very comfortable getting out of the market at break even. That promotes selling at higher levels, as it could cause a problem here and there. You be wrong, I don’t think it changes the overall trend by itself, but it is something to pay attention to. Trading psychology dictates that after taking horrific losses, traders are typically often more than willing to take a break even trade after being down for so long.
The main take away
The main take away is that Bitcoin continues to be very strong. Buying dips continues to work, as long as we can stay above the $6000 level. The next target after breaking above the pink box on the chart is the $10,000 level, something that seems very possible and more likely than not. With a lot of global concerns out there, it makes sense that money is flowing into Bitcoin to protect its value.