Trading Bitcoin: FOMO to $13k?

FOMO to $13k?

FOMO to $13k: After last weekend’s parabolic increase, Bitcoin has retraced 2% to a price of $9.1k. As the bulls pushed higher, Bitcoin was rejected by the 0.382 fibonacci resistance level at roughly $9.4k. Currently, Bitcoin is on a green 7 of 9 candle on the daily chart above. Therefore, price is bullish for now and will likely reach a green 9 in two days before a further correction.

4 Hour

Bitcoin is currently on a red 4 of 9 candle on the four hour chart above. After price flipped from a green 4, Bitcoin corrected from $9.4k to $9.1k. Currently, the sequential indicator is on a red 1 to 4 correction. Additionally, if price flips to a green 1 and is succeeded by a green 2, look for another retest of resistance at $9.4k. Conversely, if price does not flip to a green 1, look for more downside momentum in the short-term.

Weekly

On the weekly chart above, the Wall Street version of the sequential indicator is in a recycle period in which numbers are not displayed on the chart. However, we can count the number of candle sticks to give an approximation of where the momentum of the trend is heading. Currently, Bitcoin is on a green 2 on the weekly chart. Furthermore, a green 2 going above a green 1 is considered bullish. While the 0.382 fibonacci level has served as a significant resistance level, it becomes weaker each time the bulls test resistance. We discussed this concept in-depth in a previous article. Additionally, the longer Bitcoin remains above $9k, the higher the probability price will break above $9.4k. If a break above resistance should occur, the next levels of resistance remain at $9.6k and $10k.

Cryptocurrency News

Facebook recently announced plans to build a global financial system based on their cryptocurrency Libra. Facebook’s cryptocurrency is tethered to the value of the US dollar so it will not appeal to users as a speculative investment. That being said, it is arguable that Facebook’s cryptocurrency is a net benefit for Bitcoin. After Facebook released plans for a cryptocurrency named ‘GlobalCoin’, the price of Bitcoin skyrocketed to $9.4k, a new yearly high. While Facebook’s cryptocurrency is not a direct competitor to Bitcoin, more retail investors may become intrigued by the concept of a digital currency.

Conclusion

FOMO to $13k: Bitcoin remains in a bullish posture after today’s pullback to $9.1k. Fibonacci resistance is becoming weaker at $9.4k and a break and it is likely we will break above it in the near term future. If price should fall below $9k, look for support ranging from $8.8k – $8.6k.