So here we are, back in this triangle. A strong FUD storm temporarily yanked us out of it, but it bounced right back in, and this is where the market clearly wants to be at the moment. Even with the recent 'Bitcoin is official currency' news, there isn't enough velocity to escape. Bulls aren't confident enough to put their money back on the table, and bears aren't confident enough to short it. It feels fragile in both directions. Volume picked up a bit during the FUD and the bounce which followed, but on today's daily it seems to be lackluster at best.
What's interesting about this symmetric triangle is that we are nearing the end of it. And the .236 fib is about to intersect with the top of the triangle. This will likely provide more resistance to a breakout. But if we do manage to break out, it could be be a nice level of support going forward. Sentiment-wise, breaking this fib would be huge. And being rejected off of it could signal a turn back down - potentially re-testing the recent 29k low.
If we do breech the .236 and it holds as resistance, barring any additional FUD, 40k would be the next challenge. Even if we cross it, I won't be bullish until we hit 45. This would put us comfortably past the .382 fib (around 43.5k) which will be a huge line of resistance. 45k is my target for a true momentum swing.
At the moment I don't feel like we have the rocket fuel to get us there. While a bump up to the high 30's and low 40's is definitely on the table, I don't feel like we have the fuel or momentum to break the .382. We will need much more fuel in terms of good news and sentiment to accomplish that. Honestly, I think it's good news that will be needed.
So - in the next few days, we will be at the end of the triangle. This weekend could get very interesting. If we break up and hold the .382 as support, expect price action around 40k for a while. If we reject and go down, a re-test of 29k is possible, then bouncing back to the low to mid 30's for quite a while.
Of course, this is just based on the chart. Many people say that TA doesn't apply to crypto. I disagree in that market psychology is thing, and has been provably reliably predictive for hundreds of years. But crypto has a lot of wildcards which can turn market psychology on its head. Whales, FUD, and News can move markets on their own, TA be damned. See the recent FUD storm for evidence of that. The FUD moved the market, but it didn't take the market long to bounce back to its natural state. The market is the river. And Whales, FUD, and News are the beavers.
What's interesting about this symmetric triangle is that we are nearing the end of it. And the .236 fib is about to intersect with the top of the triangle. This will likely provide more resistance to a breakout. But if we do manage to break out, it could be be a nice level of support going forward. Sentiment-wise, breaking this fib would be huge. And being rejected off of it could signal a turn back down - potentially re-testing the recent 29k low.
If we do breech the .236 and it holds as resistance, barring any additional FUD, 40k would be the next challenge. Even if we cross it, I won't be bullish until we hit 45. This would put us comfortably past the .382 fib (around 43.5k) which will be a huge line of resistance. 45k is my target for a true momentum swing.
At the moment I don't feel like we have the rocket fuel to get us there. While a bump up to the high 30's and low 40's is definitely on the table, I don't feel like we have the fuel or momentum to break the .382. We will need much more fuel in terms of good news and sentiment to accomplish that. Honestly, I think it's good news that will be needed.
So - in the next few days, we will be at the end of the triangle. This weekend could get very interesting. If we break up and hold the .382 as support, expect price action around 40k for a while. If we reject and go down, a re-test of 29k is possible, then bouncing back to the low to mid 30's for quite a while.
Of course, this is just based on the chart. Many people say that TA doesn't apply to crypto. I disagree in that market psychology is thing, and has been provably reliably predictive for hundreds of years. But crypto has a lot of wildcards which can turn market psychology on its head. Whales, FUD, and News can move markets on their own, TA be damned. See the recent FUD storm for evidence of that. The FUD moved the market, but it didn't take the market long to bounce back to its natural state. The market is the river. And Whales, FUD, and News are the beavers.