Bitcoin seems all set to test the trend line resistance for the third time which means that we could see $9.7k near-term before the downtrend ensues. It is important to realize that this is one of the last few uptrends within this downtrend before the road to $3k. Throughout the ongoing uptrend, we have been bullish where there have been good opportunities. When BTC/USD was trading around $6.7k, I discussed how it was very likely to rally towards $9k to fill the CME Futures gap and it played out as we anticipated.
However, the larger trend remains bearish and has been for a long time now. It is therefore reasonable that I focus more on the bearish view. One of the key principles of trading is to go with the trend because the trend is your friend. Until and unless a trend is broken, it is too dangerous to be betting against it. We cannot fight the big players in this market who control the direction of the market and in this market, they basically print the price. So, until and unless we have a higher high and higher low on the weekly chart that breaks this downtrend, there is absolutely no reason to be bullish on the market especially at this point.
There is a very high probability that we might see BTC/USD rally higher to test $9.7k. However, it wouldn’t be prudent to go long on the market expecting that. The trend is bearish and we need the price to go higher so we can enter short positions at better prices. Meanwhile, the S&P 500 (SPX) has run into a key resistance and is struggling hard to remain above the 5 EMA to maintain the bullish momentum. However, it has become clear that it is only a matter of time until it declines again. This time, the downtrend will be more aggressive in both cryptocurrencies and stocks and traders might be better off going with the trend rather than trying to fight the market.