The Bulls Are Back in Town (for Now at Least) / Why Did Bitcoin Go Up Today?
BTC broke $4.2k resistance and then ran hard up to $5k as shorts closed, stop buys hit, and people jumped in. Alts lagged behind, but all things considered, the market had a nice rally.
Some might look at this and say “this looks like manipulation.” However, I would argue it is more technical.
BTC had been trapped below $4.2k resistance for a while, and it had also been trapped below some EMA resistance.
As hopefully you can see on the chart, the trend started to reverse at the end of Feb (the first green arrow), then was setting up to try to break the next leg of resistance (second green arrow), and then when it finally broke it (third green arrow) it ran.
This is really no different from what we have been seeing in alts… and from this perspective it was a welcome, but somewhat predictable move.
Using the same indicators I would suggest it now would be the best case if BTC could stay above $4.6k BTC/USD where the 200 day EMA is in blue on the chart. Consolidating on top of the 200 day EMA is something that alts that continued to run did (see LTC charts below for examples).
NOTE: Just because we had a nice breakout doesn’t mean the bear market is over. We still have potential for another leg down. That is true logically, and true based on some chart analysis methods. Consider one possible case using the chart below that I created a while back. It isn’t meant to be an exact story, it is only meant to roughly illustrate how we have room to have an epic rally and still retest or exceed lows later.
NOTE: One possible world is a world in which alts catch up to the BTC run. You can see that happened a bit already. So with runs like this you can sometimes get a second chance with alts. That said, sometimes when BTC is very strong alts underperform against it. As a hedge one might hold mainly BTC with a stop, but then commit some portion of their bankroll to coins that have showed strength previously like LTC and BAT and coins that haven’t shown their full potential yet like ETH. Probably not the time to go low cap hunting, but higher cap alts may have opportunities left in them if historical patterns are followed.
“BTC Breaks Resistance and Runs Hard” contains information about the following Cryptocurrencies: