Receive all Cointelegraph news immediately in Telegram.
Following a breakout over $700 last week, the market has since been on a tear to the upside as late longs struggle to re-enter below $1000.
Following a breakout over $700 last week, the market has since been on a tear to the upside as late longs struggle to re-enter below $1000. This is not to say that it has been smooth sailing considering we have seen a few 5 percent pullbacks since the rally began, however, these have been quickly brought up and thus have been short-lived.
As Bitcoin continues to push to new highs this December, we can’t help but think about what we mentioned in our previous update. In addition to what appears to be a demand spike caused by global macro worries, the price action since the breakout above $700 has been indicative of a supply shock as a result of the halving. Not only that but despite what has been overbought momentum for the past month or so, the remainder of the technicals are signaling that a continuation to the upside is likely to occur over the coming weeks.
With that in mind, let’s take a look at the three-day chart once again as it remains highly relevant for the medium to long term outlook. We can see that the price took an unorthodox route higher by breaking out above the rising wedge, which is typically a bearish pattern sparking the move we are still currently in the middle of. Additionally, we can gauge how bullish the market is by how quickly it ripped up through the long term OTE short zone, as seen in the red box, which in this instance was very fast. Also note that the price has already broken above the top of the said OTE zone, which tells us that in the not too distant future there is more room to run to the upside.
Moving on to momentum and volume, notice that RSI and the Stochastic are both officially overbought now, the PPO is starting to paint some weak sell signals, and we are pretty far extended above the 200-period SMA. Not only that, but the volume profile remains very thin all the way down to around the $500 level and exchange volumes have yet to break to new highs. Conversely, MACD looks very good as it accelerates higher, the A/D line continues its steady uptrend, and market structure is undeniably bullish, all of which confirms the potential for significantly more upside following a recharge of a momentum of some kind.
Keep in mind that a recharge can take the form of a sideways consolidation or a selloff into support, however, given the recent history of this rally we think a sideways move is the more likely scenario. We also want to mention the possibility of a breakout above $1000 to get the players juiced up about new ATH’s, only to let the price fall back down a few hundred dollars to wash out late longs and weak hands. If this does materialize at some point, we think it would present a great buying opportunity for a continuation higher early next year.
- Bitcoin Price Analysis provided by BBA
Generally speaking, we remain unequivocally bullish on the medium and long term forecasts for Bitcoin’s price. However, we think there could be a slight pause or perhaps some added volatility, the near-term outlook is marginally more murky around the psychologically significant $1000 level. Having said that, we are getting up into an area where historical resistance is limited thus thin air could have unexpected effects on price- likely to the upside, which means holding on for more upside is probably the safest play for now.
BullBear Analytics is the longest standing cryptocurrency forecast service in existence. BBA began posting Bitcoin price reports and updates based on technical analysis via Bitcointalk.org back in late 2010, and has evolved into a buzzing community of savvy and professional cryptocurrency traders. Adam Wyatt (@AKWAnalytics) is BBA’s COO & Chief Analyst.
We are offering a special discount to our Cointelegraph followers so enter ‘HOLIDAY20’ at checkout for a 20% discount on all packages until the first week of January!
Thanks, and have a great BITday!
Disclaimer: Please always do your own due diligence, and consult your financial advisor. Author owns and trades Bitcoins and other financial markets mentioned in this communication. We never provide actual trading recommendations. Trading remains at your own risk. Never invest unless you can afford to lose your entire investment. Please read our full terms of service and disclaimer at the BullBear Analytics Legal.
Follow us on Facebook
For updates and exclusive offers, enter your e-mail below.
Thank you for contacting us! We will reply to you as soon as possible.
Thank you for your interest in our franchise program.
We are considering your request and will contact you in due course. If you have any further queries, please contact: