Can Bitcoin (BTC) Rally Higher While Traders Eye $6,000?

Can Bitcoin (BTC) Rally Higher While Traders Eye $6,000?

Bitcoin (BTC) has seen some bullishness today that got the bulls hopeful about the price eventually breaking out of the falling wedge seen on the 4H chart for BTC/USD. However, there is still a lack of momentum for the price to see further upside. As long as the 61.8% fib retracement level is not tested, the possibility of another sharp decline remains there. So far, the bulls and the bears have been fighting for control but it appears that the market makers want to continue with the stop hunt for a while before we can see a trend reversal. There is room within the falling wedge to decline further. It is important to note though that it is very risky to be bearish on BTC/USD around current levels. 

It is true that the trend still remains bearish despite the bullish setups we have outlined. We have discussed before how a falling wedge until broken remains just that. So, the price could go further down this wedge but sooner or later it will have to break out as it has before. The point is, we might see the market inflict further pain on the bulls and get the bears trapped in while doing that. Then when no one wants to buy Bitcoin (BTC) thinking it is going to fall to $6,000, we are likely to see the uptrend begin. At the moment, it is not a good idea to rush into bullish entries because we could see further short term downside follow. As long as the 61.8% fib retracement level is not tested, confusion remains within the market.

The daily chart for EUR/USD has displaced some healthy signs of further bullishness. The uptrend remains intact and the pair has found support on top of the falling wedge. As long as this pair does not fall back into the falling wedge, I think Bitcoin (BTC) bulls don’t have much to worry about short term. We can see an uptrend on the RSI as well which remains intact and has now been breached yet. This is a good sign for EUR/USD and therefore for Bitcoin (BTC) because historically we have seen strong correlation between the two. 

Although there is a bullish setup on BTC/USD that would eventually result in further upside, we have to be very careful here and not try to rush into bullish positions. If you are accumulating, then it might be a good idea, but if you are trading on margin then it’s best to wait for the trend to reverse. Remember, the best traders don’t worry about catching tops and bottoms. They trade the moves in between and they do it often, with success and that is how they consistently stay profitable. So, while I do not think the price will decline to $6,000 from here, I still think there is a very strong probability that the market may inflict further pain on Bitcoin (BTC) bulls to scare them off before the trend reverses as well as to make the bears complacent and trap them before the imminent reversal.

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