TL;DR bump, bump, bumping on the ceiling.
Bitcoin is keeping traders on the edge of their seats, flipping from bullish to bearish and back repeatedly over the course of recent days.
We have a collection of resistance factors in play in the same area, and bitcoin has now risen to meet these, backed off, and risen again several times. A strong move higher at the beginning of last week ran out of steam in the $12k area.
Firstly, there is the down-sloping resistance line that joins the year high of $13,880 with the next, lower high and then the more recent lower high. Then there’s the 23% fib level just below $12,400. Lastly, the $12k level is already an established support/resistance zone going back to 2017.
Bitcoin has ranged in the zone immediately above $11,500 all week now, with the bottom of that area marked by the 38% fib. RSI readings on the shorter-term timeframes have cooled off. While the daily is still high, it remains below 70.
In summary, it’s on a knife edge. Bitcoin could go either way, and traders are waiting for the signal they need to take their position. Whichever happens, when it does go one way or the other, it’s likely to go hard.
There are reasons to be short-to-medium term bullish. Bitcoin Dominance continues to trend upwards, almost touching 70. The crypto world as a whole is expecting more from bitcoin and positioning accordingly. Meanwhile the key moving averages are slowly moving upwards, with the 50-day MA just under $11,000. These will act as further support as they rise.
But with bitcoin, you can never discount the wildcard, and there has been lots of stop-loss hunting going on, as suggested by the fast moves within a relatively narrow range. Bots programmed to push the market around to margin-call other traders have been at work, pending the breakout up or down. It’s quite possible we’ll see another major fakeout or shakeout – a big move up or down, followed by an opposite and even larger move.
But this correction phase has now lasted over 6 weeks. We can expect resolution soon. $8,000 or $13,000–$14,000 is on the cards soon (and if you believe Max Keiser, $15k).
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