With the new month, bitcoin has still been trading within that very tight range. Just this morning, however, we may – may – have seen the first signs of green shoots as the price breaks out of its holding pattern. We will know more later.
November has historically been a bullish month for BTC and there’s some expectation that will happen again – but remember, we’re contrarians here at Inferno and when the herd thinks something is going to happen, the opposite is likely. Now we don’t know whether ‘the majority’ think things are bullish at this point – the evidence suggests not – but take what ‘everyone’ says with a grain of salt. In a market, nothing is definite.
Volumes are still low, but appear to be rising slightly, which will be a critical factor in determining the strength of any given move and how likely it is to follow through into the next stage of the cycle. Analysts are split on whether we are consolidating here ahead of a recovery in the final two months of the year – as we’ve said, bitcoin’s traditional Christmas rally – or whether we will break support at $5,700 and head into a long crypto winter. Remember, with low volumes, it’s easier for large players to push the market around, so a pick-up in volume is critical for the health of the ecosystem.
Right now, it’s still unclear which way things will go. Sunday saw a $100 leg up but BTC still sits within the established $200 range. We’ve just pulled above $6,500 at the time of writing, but there’s no telling whether that will be sustainable or whether it’s a fakeout. There’s support at the $6,200 zone, resistance around $6,500. If we close above that the scenario becomes more bullish.
As we suggested on Monday, the outcome of the midterms could have some bearing on what happens next, since this will impact the US financial markets – and those wider market conditions will likely play into whether bitcoin breaks up or down out of its nine month descending triangle pattern. If traders feel wealthy (due to a rally in the Dow, for example), they will be more prepared to put money into BTC. So it will be worth watching the stock markets and taking some cues from them. However, this is just one factor of many.
In the alts, there are signs of life. BCash has posted significant gains ahead of its fork mid-month. In previous such forks and similar events these rallies end before the fork itself as traders look to front-run each other ultimately selling the news. The same will almost certainly happen here – expect blood for BCash soon.
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