Trading Bitcoin: $10k Incoming?

$10k Incoming?

$10k incoming?: Bitcoin experienced a tremendous increase over the weekend and is now trading at a price of $9.3k. In last week’s article, the sequential indicator on the daily chart told you to take a long trade after the green 2 closed above the prior green 1 candle. If you were to take this trade at $8.1k, you’d be sitting in a decent profit of roughly 14%. Currently, the sequential indicator is on a green 6 of 9 candle with more upside potential incoming.

Brief Fibonacci Rejection

Bitcoin briefly reached the critical resistance level at $9.4k before being rejected. While the 0.382 fibonacci level at $9.4k is a critical resistance level, it is not as significant as it once was. The more times price tests a resistance or support level, the weaker that level becomes. Therefore, a break above $9.4k could easily go to $9.8k before further testing the $10k price level. Aside from the 0.382 fibonacci resistance level, Bitcoin faces little to no resistance until the 0.618 fibonacci resistance level at roughly $13k.

4 Hour

While viewing the 4 hour chart above, you can see price flipped on a green 9 which led to a substantial increase into the $9k region. Currently, we are on a green 2 of 9 candle. Bullish momentum should continue for the next three days according to the sequential indicator.

BitMEX Funding and Premium Index

One notable indicator exhibiting bearish characteristics is the BitMEX Funding and Premium Index created by NeoButane. The funding and premium index has served as a very successful counter-indicator throughout the past year. Within the last two days, the index ticked into positive territory which tells us there will likely be a pullback soon. However, the funding and premium index can remain overextended for a substantial period of time.

Cryptocurrency News

Bitcoin miners are becoming bullish. Below is a chart of Bitcoin’s hash power, which is currently at an all-time high.

In other news, Coinbase recently reported their custodial services now hold over $1.3b in digital assets and expect to reach $2b very soon.

Conclusion

Since the beginning of the May uptrend, Bitcoin has increased by 180% without a single pullback on the weekly chart. This is shocking when compared to previous bull market cycles. Nothing fundamental in the development of Bitcoin has led to this price increase. While Bitcoin’s underlying technology is improving, it’s not improving at a rate which would cause price to increase by 180%. This run up has been highly speculative and could fall just as easily.