In an interesting turn of events, Bitcoin (BTC) bulls have finally broken silence and stepped back in the game as calls for a rally towards $6,000 start to become more popular. There is immense pressure on the bears at the moment to give up and it seems like they will in the next few days. It is important to note that the sideways movement in BTC/USD that we saw for the past few weeks has been mainly due to the sell pressure created by the bears and not a loss of faith on behalf of the bulls. Those that are bullish at this point will always be bullish because they understand Bitcoin (BTC) and believe in its long term prospects. On the other hand, those who are bearish at this point will soon begin to give up once the price makes a few moves to the upside.
So far, we have seen a series of mini rallies to the upside but this is not enough to scare the bears. The bulls now have to take the price above the 21 Day EMA to convince those waiting on the sidelines that the bears have finally lost and they can step back in the ring. There are still plenty of people in this market who would like to play it safe and take any opportunities they can when the market presents them. They may not like Bitcoin (BTC) or believe in it but they know they can make money trading it. Right now, the way to make money trading BTC/USD for such investors is to buy, not sell. Once the price climbs above the 21 Day EMA, we will have confirmation that a sustained rally to the upside can be expected in the weeks to follow.
There are times during a market cycle when investors argue whether the bottom is in and if the price can be expected to go down further. We have been through that phase when BTC/USD was trading around $6,000. However, that phase is now over. Even most professional traders that believe that Bitcoin (BTC) has not bottomed yet are also of the opinion that the price has to go up if it is to fall down again. For the price to fall to a new low, a major sentiment shift has to occur. This would be a complete obliteration of the bullish resolve. Before that happens, the bulls will remain hopeful of a recovery.
In my opinion, the only way to completely shatter the bullish resolve would be for Bitcoin (BTC) to retest its previous market structure and face a strong rejection. That would convince a large number of bulls that it is not over yet. When they take their money and go home, only then we can expect the bears to drag the price further towards a new low around April or May this year. Until then, we have to assume that the price has already bottomed out and if it does not get rejected at the previous market structure, it should continue to rise for the next few years till it tops out again.