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$BTC: Are we set for the moon, or is it too early to get excited? πŸ€”

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@beehivetrader
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Bitcoin made headlines in the crypto space, with an impressive 12%+ gain in the last 24 hours, leaving almost all the altcoins in the dust, except a few (like One, Celr, Ftt, and some others)

Yesterday, I published a post about weekly market roundup and I hope you have not missed out to read till the end:

In case you are already in profits from the alts, you may want to take out some of the profits, and enter in the pullbacks, or wait for Bitcoin price action to stablise.

😊

But it's fine, no worries! I'm back with another analysis about the Crypto markets, especially Bitcoin.

Here's one of my old posts, almost 10 days back, which was about an incoming breakout, and believe me, its just starting, but the road wont be smooth, that's what I can say as of now.

If you look at the weekly, it did take out the multi year diagonal resistance. Right now, we should be a bit cautious, as there's a small gap on the CME charts. (explained below)

Chart: BTC/USD, 1D, CME Futures

Link: https://www.tradingview.com/x/tVOM1589/

Zoomed In:

Link: https://www.tradingview.com/x/4xoqw9lf/

Noticed that gap? It means no trading has happened in that range. Gaps result from extraordinary buying or selling interest developing while the market is closed.

This looks more like a Breakaway gap.

These occur when the price action is breaking out of a trading range or congestion area. We had been consolidating on the daily for quite some time, and formed a symmetric triangle pattern, and it broke on the upside, (which is good), and the the best thing? We broke out of the weekly multi year resistance as well.

Although There’s a saying among market participants that all gaps need to be filled there can be exceptions, and I'd rather say, some gaps are actually not filled.

If you are more interested, I found a good article online about the same.

Here's the technical chart, with all the bullishness loaded:

##chart: BTC/USD, 1W

Points to note:

  1. Triangle breakout (Bullish)
  2. Trading above the Ichimoku cloud, signalling a trend change (bullish)
  3. Supertrend also supporting the price.
  4. Zoom in a bit and you will be able to see that the 1D horizontal resistance around 9.9k was also taken out quite impulsively, with a bullish daily candle.

On the other hand, the volume profile looks very decent, and the 9000 -ish Zone, should provide solid support in case of a retest of the trendline. That should be a very nice buy zone if BTC reaches there.

Apart from technicals, these are the other potential reasons for the breakout:

  1. We see word about another $1 Trillion Stimulus package coming soon!which should inflate the market again. Source: Bloomberg

  2. We have also seen that the recent twitter hack has somewhat brought cryptos to mainstream attention, and though we should be excited about this, the google trends search interest shows that there has been only a little spike in interests. Although, we can see that the search term for "How to buy Bitcoin" started going up a bit:

  3. Gold has been printing green candles for quite some time, and has breached the previous All time high.

Here's a small analysis on gold, which I covered in a previous post

Do check it out, and see what Gold is up to. I'll be covering more on Gold an Silver soon.

So, these are all what triggered the breakout, but should we FOMO yet?

I dont think so. It will be wise to wait for a pullback before entering. Long term HODLers can start using Dollar cost averaging strategy, depending on the risk appetite.

Now there is one more thing, which I want to cover, and it's very critical to the price action of almost all the assets, including equities, bullion, cryptos, and almost everything else.

I covered a small article on Dollar Index yesterday.

Though I'd say we still didn't have a close below the support yet, to be bearish enough on the index, we should still be cautious.

Here's a bonus update:

##chart: DXY, 1D

Link: https://www.tradingview.com/x/MCvmTTtM/

Even though we see that it has made a double top pattern on 1D, and is also attempting to break down from the diagonal trendline support (please check the article), there's one thing I am massively concerned about.

Its the monthly chart:

Link: https://www.tradingview.com/x/7o0iY9U5/

I'm not going to cover what that means yet, so stay tuned for an update on this soon. It needs to be covered in detail. :)

If you liked the article, consider sharing this with your friends and circles, and also spare an upvote for me,so that I get motivated to keep sharing market insights and analysis:)

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