On the one hand, going long at resistance is a perilous move. However, it’s worthwhile remembering what happened in November last year when Bitcoin first punched through US$20k: a monumental and almost unstoppable 200% rally that wrecked the majority of those who tried to trade it.
Despite what some might argue, HODLing isn’t always the best option when it comes to crypto. For instance, these last three months represented one of the best compounding opportunities you’re ever going to see. But there are certain phases in the market where all you need to do is hold on for dear life. We may be approaching another of those phases.
BTC’s line in the sand
A few weeks ago, Tom from FX Evolution was telling us to watch out for a definitive breakout of Bitcoin’s Wyckoff accumulation pattern. Well, we got the breakout and then some. Since then the BTC price has surged from US$30k to US$50k with barely a pause for breath.
But now Bitcoin is up against what might be considered the final boss of the winter bear market. While all the focus has been on the US$50k break, for Tom the more significant level is the previously established support-turned-resistance at US$51.5k. Break and hold above that and we’re off to the races. Fail and we could see a new range established with the lower bound at roughly US$41k.
In the short term, the daily 20 EMA is an important line to monitor, having already acted as support twice on this move up. If/when this current surge runs out of steam, it could be a good place to set some bids – or to gauge whether a deeper correction is on the cards.
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