Well, I must say seeing BTC above $27K does wonders for the soul. It’s been a very long and drawn-out process, hasn’t it? However, as bullish as things appear, and things do look bullish, we may still see a further correction. However, continuation higher is very likely in the immediate short term. Why do I say this? Well, as a trader, I am constantly observing chart patterns, formations, and indicators.
Something that I have noted during this pump is the following: Bearish sell indicators and patterns are being rejected by BTC on the lower time frames. This is inherently bullish! In a similar way, when bullish indicators are being rejected, it’s extremely bearish. Taking this into consideration presents a very real possibility of Bitcoin moving even higher in the immediate short term.
It’s quite possible that we could see a local top of anywhere between $30K and $40K. Something that I addressed back in 2022 was that a banking crisis was imminent in 2023 and was likely to provide an enormous push for Crypto, which it has. Simultaneously, this has produced a temporal decoupling from the stock market. Why do I say temporal? Well, it’s nothing new.
Bitcoin has decoupled quite significantly from traditional markets before. What we are wanting to see is an established and sustained decoupling. As mentioned on numerous occasions, this requires time and is very difficult to pinpoint. It’s more a case of having to wait, as opposed to trying to predict. In other words, there have been many false breakouts, and we need to see a confirmation.
As I am writing, the market still appears bullish and could easily push towards the abovementioned levels. Some might say that I have suggested a rather broad range. That’s the Bitcoin dynamic right there! When BTC makes serious movements, it does just that, and it becomes somewhat foolish to be overly restrictive. Bitcoin could easily play around within that range without breaking a sweat.
However, I would abandon the idea of further upside if bearish sell indicators begin forming on higher time frames. An asset can ignore lower time frame signals, but that becomes a lot more difficult to accomplish once those signals begin printing on higher time frames. This is important to note and keep an eye on, and in my opinion, is the only potential obstacle between Bitcoin and $30K.
A concerning aspect of this pump is that it is still largely driven by retail. Something that I want to highlight and draw attention to is that the final collapse of the previous bear market was not triggered by an event, but rather the mega whales. A unified “sell” from the top wallets flushed retail right out, and subsequently provided these behemoth wallets with loads of cheap Bitcoin.
Don’t fall for the narrative: There is nothing left to push the price of BTC down. It’s all about liquidity and who has the majority of it. Disasters are not necessarily required in order to trigger price collapse. Once again, I have chosen to be objective, as opposed to promoting a view that is beneficial to my “bags”. Yes, BTC is bullish short-term. However, continuation is not a guarantee.
Despite some really impressive price action, it remains wise to remain vigilant, as profit-taking will kick in at some point. Depending on who’s realizing profit will ultimately decide the depth of that retracement. As stated, I remain bullish until such a time as I see bearish indicators coming through on higher time frames. Exercise caution, and see you next time!