BTC/USD
The bitcoin market rallied again during the day on Tuesday, breaking above the $7000 level. This was a very good sign, and it did clear the shooting star from last week. Now we are challenging a shooting star that sits at the $7000 level, and that of course could cause some resistance. However, the market does look as if it is trying to pick up momentum but I think it’s only a matter of time before we sell again. After all, we are still well below the downtrend line that has been so crucial for this market, so I think at this point it’s still far too early to feel comfortable going long. I don’t think that this market will be able to break above the downtrend line which is at roughly $8000, so at this point I’m looking for an exhaustive daily candle to sell.
The alternate scenario of course is that we do break above the $8000 level, and that should send this market much higher, perhaps to the $10,000 level after that. That would be a significant shift in attitude for this market and could bring in the next wave of buyers. In the meantime, the $6000 level continues to attract a lot of attention as well, so I think we are essentially looking at consolidation with an overall downward bend to it. As I stated previously, if we break down below the $6000 level, bitcoin is in major trouble and could collapse down to the $5000 level rather quickly. There are a lot of technical reasons to think that could happen, but clearly the $6000 level has been a bit of a “line in the sand” for the buyers. If they lose it, it’s hard to tell what happens next as it would be such a major problem.
