Despite the long-standing anticipation of Bitcoin reaching 100K which the Holdrs and Bulls were patiently waiting for and finally occurred this week, there is now the hereafter.
My regular readers know that I personally do not have positions in any of the cryptocurrencies or ETFs that I comment on technically in my Weekly Studies and the reason for that. Opinion is easily clouded by the heart and desire.
Despite the long-standing anticipation of Bitcoin reaching 100K which the Holdrs and Bulls were patiently waiting for and finally occurred this week, there is now the hereafter.
My regular readers know that I personally do not have positions in any of the cryptocurrencies or ETFs that I comment on technically in my Weekly Crypto and ETF Studies. The rational for that, “Opinion is easily clouded by the heart and its desire”. For this reason, from the outset, I chose to avoid any temptation to trade or invest (not easy for one who was a institutional trader in a former life) in the instruments I follow on a technical basis for my readers.
Although on a purely technical basis, “round number” resistance on its own does’ merit attention technically, but it stands on its own and is not pure price resistance (more on that follows). Often used when prices have reached “blue sky” territory it marks a level where investors, in the collective psyche, have marked a “price goal”. In the case of Bitcoin “when it gets to 100K I’m a seller” or “time to peel some off” (just two examples).
Pure price resistance (or support) takes on many forms. To name a few, previous price pivot points, price retracement levels using Fibonacci Analysis, price congestion areas where interaction between buyers and sellers have acted prior to a price move that had followed, trend resistance or support utilizing trend line or Median Line Analysis and the Cloud model. When there is a confluence of these the more weight should be placed on the defined level, as opposed to one phycological data point.
Earlier this week, prior to Bitcoin’s overtaking of the symbolic 100K level, I posted this chart to social media. My technical comments regarded what I believed was the preferred Elliott Wave count. In that, a wave 2 corrective wave was unfolding since the completion of Wave 1 that found its genesis at the October lows. I thought at that time that it was posible that the 38.2 retracement of wave 3 (P2 to P3) would be tested but the remaining underlying strength was stronger than I thought and today price has, after a brief intraday dip below the Lower Parallel yesterday, has moved back above the 100K level and is set to challenge the Median Line (red dotted line) of the Schiff Pitchfork (red P1 through P3). My main concern rearding a continuation in the price rally remains. Although it remains positive territory, MACD continues to track lower under its signal line and the Stochastic Momentum Index is waffling sideways. The Sweet Sixteen Momentum / Breadth Oscillator registered a lower high last Sunday and has fallen below its 13-Day SMA (red line). If price can overtake the Median Line and close above it I would feel more comfortable saying that the 2-week, wave 2 sideways consolidation has run its course and the measured move out of the “box” targets 104,400 just above Thursday’s intra-day high.
More details in this week’s Market’s Compass Crypto Sweet Sixteen Study that will be sent to my paid subscribers Sunday morning.