BITCOIN - We PUMPED! What's Next? - Bullish/Bearish Scenarios
Bitcoin had a glorious pump today, shooting up more than $2,500 or ~6%. So is that an indication we move into full out bull-mode? Maybe. Maybe not. Wonder why I'm hesitant? Here's why:
BTC has been moving in this ascending purple channel since July from the low of $28,800 to $48,000. If you've been hodling since the pump, you've made some serious dough. However, BTC has been showing signs of exhaustion as it heads into strong resistance. The $48k level was a key level of significance in the previous pump to the all-time high and in its collapse. BTC is up 63% since last month. I know we all want the moon shot, but I think it's important we take time to pause and think these scenarios out so we can properly position ourselves to A) make the most money or B) save the most money. So let's take a look.
Bullish Scenario
BTC appears to be repeating the same price action fractal that took it from $29k to $42k. If it plays out and continues, we should see Bitcoin continue on an upward trajectory within the channel. This fractal does suggest a short-term retest of the channel bottom, which if it plays out, will no doubt be scary. But as long as the price stays within the channel, should continue upward in the long-term. The 4H MACD is what I use to confirm reversals. I see a bullish cross over the signal line, which confirms this yellow support area . But we did dip below the zero line, which is not bullish so I would consider this move neutral at the moment. Sideways movement would not be a bad thing and I think it would be very bullish for the alts, many of which have very bullish setups against BTC .
Bearish Scenario
If BTC retests the channel bottom and breaks it, we could have a massive head and shoulders pattern on our hands with a $4,000 head that would make our Head and Shoulders target price below $40k. Breaking the channel to the downside would most assuredly be my cue to exit and wait to see if we complete the HS pattern . Keep in mind that it's not what you make, but what you keep. A move to $40k would be almost a 15% loss. The MACD does show evidence of bearish divergence (indicated by the purple arrow) and the price action is running into strong resistance. These are all bearish factors I am considering.
My Take
As bullish as this move is, I am neutral until we securely break $48k. If you follow the Elliott Wave count, another bullish wave 5 up would easily take us beyond this level. However, failure to break $48k would signify a truncated wave 5 and suggest a move to the downside which could be significant. It's also why this is a key level for me to consider everything. Plan for A and prepare for B. Either way, I'll be ready and hope you will too.
BTC has been moving in this ascending purple channel since July from the low of $28,800 to $48,000. If you've been hodling since the pump, you've made some serious dough. However, BTC has been showing signs of exhaustion as it heads into strong resistance. The $48k level was a key level of significance in the previous pump to the all-time high and in its collapse. BTC is up 63% since last month. I know we all want the moon shot, but I think it's important we take time to pause and think these scenarios out so we can properly position ourselves to A) make the most money or B) save the most money. So let's take a look.
Bullish Scenario
BTC appears to be repeating the same price action fractal that took it from $29k to $42k. If it plays out and continues, we should see Bitcoin continue on an upward trajectory within the channel. This fractal does suggest a short-term retest of the channel bottom, which if it plays out, will no doubt be scary. But as long as the price stays within the channel, should continue upward in the long-term. The 4H MACD is what I use to confirm reversals. I see a bullish cross over the signal line, which confirms this yellow support area . But we did dip below the zero line, which is not bullish so I would consider this move neutral at the moment. Sideways movement would not be a bad thing and I think it would be very bullish for the alts, many of which have very bullish setups against BTC .
Bearish Scenario
If BTC retests the channel bottom and breaks it, we could have a massive head and shoulders pattern on our hands with a $4,000 head that would make our Head and Shoulders target price below $40k. Breaking the channel to the downside would most assuredly be my cue to exit and wait to see if we complete the HS pattern . Keep in mind that it's not what you make, but what you keep. A move to $40k would be almost a 15% loss. The MACD does show evidence of bearish divergence (indicated by the purple arrow) and the price action is running into strong resistance. These are all bearish factors I am considering.
My Take
As bullish as this move is, I am neutral until we securely break $48k. If you follow the Elliott Wave count, another bullish wave 5 up would easily take us beyond this level. However, failure to break $48k would signify a truncated wave 5 and suggest a move to the downside which could be significant. It's also why this is a key level for me to consider everything. Plan for A and prepare for B. Either way, I'll be ready and hope you will too.