Bitcoin markets rallied a bit during the trading session on Tuesday, breaking above the $11,000 level and perhaps even more important breaking above the highs from the previous session. At this point it’s very obvious that Bitcoin is in and uptrend and if you’ve been watching any of these videos, you know I have been telling you that this is a market that simply cannot be sold right now. You also know that I am not a “Bitcoin believer”, but that doesn’t matter, I’m a technical analyst and markets all follow the same thing, when prices going from the lower left to the upper right, you should be a buyer and of course vice versa.
Looking at this chart though, we are a bit overextended and I think once we get to the $12,000 level, it’s very likely that we will see a bit of a pullback from that area as it has been important in the past. Beyond that, there seems to be a pattern of moving $2000 or so, before pulling back or perhaps bouncing from support. Until that doesn’t work out, then we need to simply follow that pattern.
To the downside I expect the $10,000 level to be massive support, as it not only is a large, round, psychologically significant figure, but it is also the scene of the top of the previous channel we had been trading in. With all of that, expect the $12,000 level to cause a bit of trouble, but also look at a pullback to the $10,000 level as a bit of a gift as it would continue the overall uptrend on signs of support. Even if we were to break down below there, the $9000 level would be the next support level, followed of course by the $8000 level. It is not until we break down below the $8000 level that I would become concerned about Bitcoin.
