The run over the last month has been wild, but during it there never really was a huge volatile candle like what we saw today.
It is this candle after a run up that makes you stand up and pay attention.
There are a few things on the table here on why this big red candle that has rallied off the low was necessary and even a good thing.
There was a big gap on the Bitcoin futures at 29,700 that more than got filled, which is good because there is another big gap down at 23,800 and a smaller one even below that.
Not all gaps get filled, this we know - but some do! The fact price filled one of the three since the explosive price move began is a good thing, because again, some gaps will get filled in the end.
You all know I love the 10 day moving average and the price spike down touch through it briefly before rallying off the lows.
I've said it for a while, as long as the price remains above the 10 day on a closing basis then the action is as bullish as it can be.
This is the other side of the coin. Have the bulls exhausted their hunger for now? Is there further profit taking? Will this be the new high for a while?
All these are questions that will be answered over the next couple weeks.
I can say this. I will be on high alert to see how it plays out because the last time we saw a move like this followed by extreme volatility it didn't work out so well. I don't think there is a high likelihood history repeats on this, but anything can happen.
The high put in yesterday will be a focus of mine followed by whatever near-term low is created. Let the trading commence!
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