TL;DR are you ready for the action?
So it’s happening. The market is moving fast, even for bitcoin, and there’s a risk that anything we write now will be out of date within minutes. So we’ll make some general observations as well as looking at some specifics that – depending on your timezone – might already have occurred by the time you read this.
Firstly, bitcoin has broken through resistance and, at the time of writing, is trading at $10,700 after moving as high as $10,916. $10k was always going to act as a kind of magnet for traders; it’s a large round number, and was the point at which bitcoin topped out at the end of April 2018, making it a clear area of interest. It’s almost inevitable that traders would seek to buy bitcoins at $10k.
The real question is not whether BTC would go to $10k, it’s what happens afterwards. $10k is the point at which the media picks up on all this again, and the point at which retail traders will also start to come back in. Remember, there is strong evidence that – to date – the rise from $3,100 to $10k has been driven by institutional money. While there’s plenty more of that to come, big/smart money tends to take a more measured approach, while retail money will FOMO in. So perhaps – and this is only a tentative guess, and not trading or investment advice – perhaps we’ll see something like this:
- $10k breaks and the wider public realises that Bitcoin isn’t dead. This is where we can expect FOMO to occur, pushing the price up to new targets in the $11-12k region – resistance was established at $12k in Q1 2018.
- That’s where we might finally expect to see a correction in earnest. At 200-400% returns, those large accounts that have been accumulating bitcoin for the last few months might decide it’s time to offload some onto newcomers and lock in some very respectable profits.
- Where would the correction end? $10k might hold, depending on what kind of overshoot we had seen on the local top; if the FOMO crowd push bitcoin to $15k then $10k would look like a relative bargain. But a correction at $12k might be significant, and see bitcoin drop back to support at $8k, or just below. A really violent pullback might see $6k again, which would retest that old support line.
- After that, we can expect the uptrend to continue, backed by all the fundamentals and good news that have been developing in the background all the time.
We want to reiterate: this isn’t written in stone. It’s just educated guesswork, not trading advice. Bitcoin has consistently confounded expectations and we’re fairly sure there are some big interests guiding the market where they want it to go. If in doubt: HODL. We’re just getting started.
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