TL;DR with $12k breached, the next major obstacle is the yearly high around $14,000 – and if that goes, then the sky is the limit.
For the past two weeks bitcoin has been trading in a descending triangle, with support around the $11k region. Descending triangles more often break to the downside, which could have resulted in BTC diving to $9k or below. In this instance, however, bitcoin broke the upper resistance line.
That resulted in an immediate move higher, with bitcoin hitting $12,883 overnight – just $1k below its yearly high at the top of the parabola. That was above resistance at $12.5k. Had bitcoin not overcome that, there was a very real chance it would retrace back down, testing first $10k and then lower levels.
That still could happen, of course – bitcoin is nothing if not unpredictable in the short term. But breaking upwards puts the yearly high back in play – and after that, it could get impressive fast.
Assuming it breaks $14k, which would be a new yearly high, there’s very little resistance above. We might expect another triple-digit rise from that point, and it could even put the all-time high in our sights.
The other side of this is that RSI and other indicators are now screaming overbought. The weekly RSI, in particular, is well into the red above 70. At the time of writing, bitcoin has just plummeted $500 with the space of a few minutes.
This is what tends to happen when the market is so overextended. Even if we’ll see $13k or $14k again soon, in the short term, there’s a lot of volatility. Shake-outs, bots hunting for stop losses, traders getting margin called as whales push the price up and down to reload cheaply and then fire the market higher. It’s all on the cards. Lots of new traders are now being attracted to bitcoin as they see the price rise, and they’re likely unprepared for the pain of seeing their investments crash in value as easily as it can rise. FOMO and panic-selling are the order of the day.
The HODLers, of course, know what to expect. Good luck!
Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.
Join us on
Our crypto-chat: https://t.me/hellabovecrypto