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Friday Inferno market update

Friday Inferno market update


Fundamentals and technicals are both looking bullish, folks!


Bitcoin faltered earlier this week and it looked like we were set to break support and head down to the next level, potentially a fall to around $6,800. In the event, though, bitcoin held the 23% fib level and support at $7,700, and then ultimately reclaimed the $8k line. It is now trading above $8,200. Ignoring the short blip to $9k, this looks a lot like the ceiling on a rising wedge stretching back a month, and breaking it would likely mean BTC saw $9k again.


Looking at the 1-day chart, the bullish picture becomes clearer. Bitcoin is trending upwards, holding a rising support line established at the beginning of May, when BTC went parabolic. While the parabolic run appears to have topped out, we’re still respecting that line and in solid uptrend.


Daily RSI is now neutral and gently moving higher – we’re not yet seeing the wild swings that so often result in violent reversal. So far, this is measured and sustainable. (Breaking $8,200 convincingly might change that picture, of course.) It’s worth noting that earlier this week, when RSI dropped to 47 – still not oversold – it was at its lowest since February. Our key moving averages – 50, 100 and 200-day – are rising to meet the price, with the 50-day now around $7,300. That should further strengthen support as it catches up.


On the weekly, RSI is reading overbought again, having only seen one red week in the past seven. But RSI can stay overbought on the weekly for a long time with bitcoin, as the previous bullrun shows.


On the fundamental side, there is the news that Big Money has been accumulating crypto on a large scale, with ‘Firm-sized’ accounts of 1-10k BTC picking up around 450,000 BTC since the December bottom. This is extremely bullish, since it indicates that smaller retail holders have barely started to buy yet.

And finally, and also bullishly, at long last we have news of Bakkt. The company will start testing bitcoin futures on 22 July, opening the way for institutional investors over the second part of this year.

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