by Lee Adler, Wall Street Examiner
Yesterday I wrote that BTC had the makings of a pretty good intermediate swing bottom.
All in all, this has the makings of a classic bottom. And there’s nothing more bullish than a head and shoulders top breakdown that doesn’t follow through. So there’s a chance that a really big rally could come from this setup.
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From yesterday’s overnight low to this morning’s high BTC had a nice 5700 point pop, or about 18%. Using the Wall Street nonsense about a 20% move in anything marking a bull or bear market, cryptos have bull/bear cycles every couple of days.
This morning’s rally hasn’t even hit resistance. Here it is on the hourly. The first resistance levels are around 37,750 and 38,250. But with hourly oscillators on the downside, they needed to test trend support first. That was around 36,000 at 5 AM in NY. They didn’t even get to the line before BTC took off like a scalded rat.
I’d guess that there’s some churning to be done as the bulls attack that trendline above 38,000. I don’t think they get through on this try. The 5 day cycle projection is only 38,300.
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For a better idea of the big picture, here’s the daily chart. We have trend resistance around 39,400, and a key resistance level around 40,000. Then there’s the flattening 200 day MA around 42,000. Cycle oscillators are bullish, suggesting that one or all of these levels will be tested over the next couple of weeks.
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Now that the bloom is off the rose of so-called BTC transaction anonymity, the criminal use value of bitcoin and other cryptos is in the process of collapsing. I don’t see a recovery from this. Good riddance.
For the next few months, look for a 31,500-42,000 trading range. That will be of interest only to scalpers. For the skeptics like me it won’t get interesting until it breaks 31,000.
For you bulls, well, I wish you all the best.
Caption graphic credit: Black and Red Caliper on Gold-colored Bitcoin, Worldspectrum, Pexels. Full image:
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