Much of last week was sideways consolidation for Bitcoin. After several back and forth days, there was a strong breakout last night that pushed price back up to the top of the range. That strength has continued this morning and it looks like another test of the all time high is in progress. While last night’s move is exciting, it’s worth noting that Bitcoin is still range bound at the moment and we’ve yet to see any confirmation that the bull has fully resumed. Obviously we are still in a strong uptrend from a bigger picture perspective, but until it actually breaks out to new highs I have to be cautious knowing that here at the top of the range is an area where there may be selling pressure. Ideally, we break to new highs on strong volume and then continue with bullish market structure to assure me that price is ready to explore higher territory. Market structure does look like a cup and handle to me furthering the bullish case if we do see a strong break to new highs. This pattern has not been confirmed so patience is key here and I plan on letting the market show me what it wants before I make any big decisions.
If we can’t get that breakout to new highs and instead sellers step in here then I will consider this current range still valid and would expect to test the bottom of the range again. That said I’m still very much a Bitcoin bull and being stuck in this range would not signal bearishness for me, but only that more time and consolidation is needed before the next move up can get going.
If you’re long Bitcoin then party party and enjoy this bull market while it lasts. Nothing about current price action suggests to me that the party is over. That said, this is Bitcoin so violent corrections can come at any time. As always, follow your plan and properly manage your risk in order to save yourself the heartache of blowing your account up. If you’re new to this and not currently invested, understand that you are entering this market late in the bull run and buying at these levels exposes yourself to considerable downside risk. Consider looking at some alt coins or other assets with lots of upside and a better risk reward while waiting for BTC to settle down into another buy opportunity.
Happy Trading!
