Tuesday Inferno market update
TL;DR was that the last chance for sub–$10k coins? Or a fakeout before another leg lower?
Traders appear have flipped short-term bullish as the price of bitcoin recovered back above the $10,000 line. After spending much of last week below $10k, and falling as low as $9,320 (Bitstamp) at one point, bitcoin looked like it was set to put in a bear leg that could take it down into the $8k range. But as the week closed, it recovered sharply, bringing the price back above $10,400 and over the 50-day moving average. What are we to make of this?
It’s fair to say it’s a mixed picture. Trading above the 50 DMA is positive, and the correction from $13,880 has gone on for over two months, which is in line with what we’ve seen before in similar circumstances. Additionally, we have the lure of Bakkt opening later this month, providing a conduit for institutional money (though that will include sellers). Daily RSI is trending upwards, and weekly RSI dipped as low as 57 for the close of last week. We did not touch the 21-week EMA, but came within a couple of hundred dollars.
We also have veteran trader Peter Brandt retweeting a well-known trader’s analysis with the comment, ‘Possibility that $BTC has entered fourth parabolic phase’. His target for this advance is $100,000. And Argentina has just imposed currency controls to help prop up its failing peso — something that is likely to fuel further interest in bitcoin. Lastly, the Fear and Greed index is trending back upwards after a period of Extreme Fear.
Looking on the less bright side, the alts are still not good. One trading analyst notes a death cross (50/200-day MA crossover) for the alts as a whole. This is, of course, a lagging indicator, but shows momentum in a downward direction. A continued sell-off may have consequences for bitcoin too. And, even if bitcoin does move up, one last shake-out and plunge below $9k would not be unrealistic first.
All the while, though, the key moving averages are rising to meet bitcoin’s price and this period of correction or consolidation is entering its final phase. Support and resistance lines are converging, and as the year wears on, we know that BTC will need to make a decision one way or another. There’s too much going on to believe it will go sideways for much longer. And the thing we know about BTC for sure: when it makes up its mind and goes somewhere, it goes hard.
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