I Play Them Like I See Them
Trading is a tough business, you have to take the losses along with the wins, there is no two-ways about it. That’s why traders tend to rely on strategy, technique, and signals derived by formulaic methods. Strategies like following the trend, candlestick signals, and price patterns that have been proven effective over long use. That’s why I still say the bulls are in control of the Bitcoin market, and why a break above the $10,000 is a high-probability event.
The first thing I want to point out is that BTC/USD has been in an uptrend since mid-March. The market advanced from the $5,000 to $10,000, doubling in only two months and now consolidating just below that level. The consolidation is forming a clear triangle pattern, a flat-topped triangle with rising support, whose support is the short-term moving average. The triangle includes three down-drafts and three up-drafts, the third of which is forming now. The new up-draft is confirming support at the EMA and a previous point of resistance that together show strong support and a shift of mentality among bearish traders: what was resistance is now support.
The only negative in this picture is the indicators. The indicators are both pointing lower, consistent with the latest down-draft, but there are mitigating factors. Both MACD and stochastic are consistent with support at the current level and set up to fire bullish signals in tandem with an up-draft in prices. The first target for resistance is $10,000, it may hold prices back in the near-term but I am growing more confident it will be broken very soon. Once broken, price action will probably begin a quick advance up to the next major resistance point near $12,000. Traders are advised to take profits at or above $12,000 or, at the very least, trim positions and prepare for another round of consolidation.
Longer term, the outlook is very bullish for Bitcoin. A break above the $10,000 would confirm the uptrend and allow us to project targets. On a pure dollar-basis, the move from $5,000 to $10,000 is worth $5,000. That puts an easy target at the $15,000 range which has provided volatility in the past. On a percentage-basis, the move from $5,000 to $10,000 is worth 100% which puts the target at $20,000 and above the all-time high. Sounds wild I know but that’s how it is, I call it like I see it and what I see is a technically driven opportunity for Bitcoin to retest its all-time high.