Trading Bitcoin: Bulls Come Back Strong After Sell Off

Daily

In yesterday’s article, we noted that Bitcoin was reaching a sequential 9 on the daily. Therefore, the trend was bullish for the entire week and was due for some profit taking. As a result, this led the Bitcoin price down to $10.1k temporarily before the bulls took us back to a current price of $10.3k.

Crypto Fear and Greed Index

As you can see from the Crypto Fear and Greed Index, we are beginning to enter greedy territory. While cryptocurrency markets often follow the phrase, “the trend is your friend”, the majority may be wrong in the near future. However, this remains inconclusive.

BitMEX Funding and Premium Index

The BitMEX Funding and Premium Index measures whether the market is net long or net short. As you can see from the indicator above, the market has been net long for quite some time. In fact, we are starting to enter a profoundly overbought territory on the index. Being said, this index can remain overextended for long periods of time, therefore, we may be just beginning another parabolic uptrend.

Conclusion

Many traders took profit as a result of Bitcoin’s previous gains last week. However, the bulls are seemingly back in full force. With a large amount of both longs and shorts in the market, volume is increasing. The world is waking up to what is happening in the cryptocurrency industry and is seems we are entering another macro bull run.

As of now we remain neutral – bullish on the trend. Critical support remains at $10k and $9.5k. Critical resistance stands at $10.5k. As long as price remains above $10k, there’s no immediate reason to be bearish.

Disclaimer: The author of the article hodls Bitcoin.