The price of Bitcoin is currently trading well above $7k just as we anticipated yesterday. It was not an easy call for me to make because most people have a binary approach to trading, meaning you are either a bull or a bear. So, I have long been known as a bear to most such traders and I have been expecting BTC/USD to decline down to $1k which I still am. The reason I expected BTC/USD to do what it did was because the market rarely crashes straight to the ground. When you trade for a long enough time, you will notice that the price action has a tell to it. You can sense when the big players are trying to trap the bulls or the bears.
Bitcoin bears have been very vocal these past few days. Letting the price fall a few percentage points was the market makers’ and the whales’ way of making the bears more confident in their opinion that it is going straight to $6k or lower. This encouraged a lot of them to short the market and as we just saw today, many of them were shaken out in this big bullish breakout that has now seen most cryptocurrencies register double digit gains. Another reason why the market was not ready for that kind of a decline just yet is because most such major moves always happen in tandem with the stock market. Considering that the S&P 500 (SPX) has still not tested the 61.8% fib retracement level, it made sense not to be overly bearish on the market.
Major markets including the oil market and the forex market are now waiting for a decisive move. WTI Crude Oil (USOIL) is currently trading above $20/barrel and has room to rally higher within the descending triangle that it has been trading in. Meanwhile, the EUR/USD forex pair remains indecisive and has yet to take a definitive direction. For now, we expect temporary bullishness in the stock market. During this time, it is also very probable that we might see BTC/USD fill that Bitcoin CME Futures gap around $8.4k before the next major downtrend. This would give retail traders more reason to be bullish on the market, just before halving which will make it a perfect setup for the big players to shake them out while they expect a rally to the moon.