Bitcoin: A Powell Movement?

The next Bitcoin resistance level is 28K and price is almost there. Can it continue like this? There are some very important factors to consider before you get lured by all the "guru" gimmicks out there. In this article I will explore what scenarios can stimulate this further and what can stop it.

First and foremost, if you haven't gotten into this long from earlier prices, NOW is NOT the time. 28K is a significant level and great location to reduce risk which is what you will help earlier investors accomplish by buying it now. The short term momentum is CLEARLY bullish, but the further price pushes, the more the risk increases.

In my previous article, I was talking about the possibility of a B Wave which is often a corrective leg that can be very dramatic and even fool many into thinking a higher high has been made. While this might still be the case, the argument is now weak. IF this is a B wave, it will have to demonstrate that by retracing dramatically over the next week. NO MATTER what ANYONE claims, NO ONE knows that future. The BEST we can do is ADJUST probabilities, AWAIT confirmations and evaluate RISKS.

IF this move continues higher with little to no retrace, then 30K becomes the next resistance in play. This will also mean that this is either a Wave 5 OR the first leg of a large magnitude Wave 3. IF it is a Wave 3, then it opens the possibilities of all the "dream" levels that the "chart pros" build their careers upon touting. Keep in mind, wave counts provide a perspective, and a way to gauge expectations in a more market oriented way. You cannot get married to them because they cannot account for unknown market information of the future.

What can keep this move going? And what can stop it? If you take a look at the bond market and gold, you will see a similar price drama. My first impression is that this is a run f or safety in the face of inflation on steroids. This came as a result of the recent bank failure drama, and the increased attention and scrutiny of the vulnerabilities within the banking sector (take a look at the countless herd mentality videos on Youtube). Bank bail outs (how ever you want to word them) means inflation and unstable Dollar.

The KEY catalyst that will keep this bull running or not is the FOMC meeting scheduled for this Wednesday. IF Chairman Powell is forced to alter his original plans and raise by only .25, and follows with dovish comments at the press conference, this run has a better chance to continuing (which means look to buy pull backs).

IF Chairman Powell goes ahead and raises .50, and maintains a hawkish position, that can mute this move, at least initially. The problem is, the rising rates may lead to more bank failures which will require more "bail out" efforts which does not help the inflation problem over the long run.

These can be very confusing and uncertain times. Either way, here are some tips to consider:

1. NO OPINIONS. Let the market provide clarity in terms of price structure and/or macro fundamentals.

2. Focus on DEFENSE during these situations. If the markets rally as a result of dovish policy, that is NOT a healthy reason to rally in this context. Less market exposure means smaller time frame strategies.

3. Don't REACT to information. Take your time to predetermine RISK. In a bullish momentum environment, SUPPORT levels carry less risk in theory. WAIT for appropriate levels. For Bitcoin that's 22K and 25K respectively.

Thank you for considering my analysis and perspective.