Friday Inferno market report
TL;DR bullish sentiment may be returning ahead of Bakkt’s launch later this month.
After dropping below $10k and bumping along the key support line last week, bitcoin has staged a strong recovery, moving up around $1,500 in the last few days. From threatening to break through support around $9,000, this now puts BTC in contention for pushing through resistance at the top of the triangle pattern that has been forming for the last two and a half months. Cracking $11k would be bullish, though we’d ideally want to see a higher high of $12,400 before we were really confident things were going to take off again.
As things stand, BTC is trading above the major moving averages on the daily chart, and trending upwards but with plenty of space to go on the daily RSI. The 4h RSI is bordering on overbought and could do with cooling down a little, though it can easily spend a prolonged period of time above 70.
Meanwhile the weekly RSI may well have bottomed; after the last bear market capitulation in 2015, we saw weekly RSI remain above 50 for many months, dropping below this only in January 2018 after the bubble had burst. Weekly RSI could therefore have tapped its low for this cycle, in the mid-50s.
Bullish sentiment is returning from various analysts, while retail traders have been shaken out by the recent correction, which has lasted for 10 weeks. Filbfilb has made the point that things are likely to move faster this time, and that comparisons with the drawn-out 2016–17 bull market will prove false; the market is more efficient and better at pricing BTC now. Should the next move be upwards, then — and bitcoin continually surprises us, so we can’t assume it will be — then we would expect it to move fast. (Should BTC drop again, we would heed Josh Rager’s warning: 9k is the area to watch, and if this fails we might expect buyers to come in around $7,000.)
Wider factors helping to power the bull market may include negative interest rates, which are becoming increasingly common around the world. Former fed chair Alan Greenspan recently commented that it’s ‘only a matter of time’ before the same happens in America.
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