As far as bitcoin price goes, I have some good news and some bad news. The good news is that bullish days are ahead of us. The bad news is that this doesn’t mean much. The eternal midrange still reigns supreme and the upside potential is fairly limited.
However, the market is looking rather good. The tether drama has subdued. The altcoin market recently went into a mini bullrun. The last couple of days belonged to bitcoin cash (BCH) which has performed really good. And, finally, there seems to be a bitcoin and altcoin uptrend forming. Although it’s too early to throw a party. First we must see a break above the $6,800 level.
Daily time frame:
After a few uncomfortable days in the $6,200 vicinity, October ended without a major crypto cataclysm. Bitcoin bounced and is currently grinding at the $6,470 resistance. The 50 day MA is keeping it down, as it has from the start of October.
Yet, there is good cause for optimism. As you can see on the picture above, RSI finally broke out of its more than three months long downtrend. It finally got above 50 and if it manages to stay above it for the next few days, this is a major thing.
In that case, we will very probably see Bitcoin venturing higher up – but not much. The first important resistance is very near, at around $6,600. This is the lower boundary of the Ichimoku cloud. The price didn’t manage to pierce that since mid-July. Furthermore, this is where we again meet the descending triangle resistance. The strength of the bulls will be seriously tested and if they fail, there is doom and gloom ahead – the $6,100 support will be hard pressed to hold once more.
However, if bitcoin closes above $6,600, bullish days will probably last well into the early winter. In that case, the price will get pulled to the upper edge of the Ichimoku, to the low $7K area. Yet, at the moment this price is a fairly far fetched idea. The $6,800 barrier will be hard to beat. Bitcoin was defeated here three times already. Even if we manage to get into the Ichimoku cloud the path is not clear. Keep an eye on the possible build-up of the bearish divergence. Taking some profits from your potential longs is always a good idea when things get uncertain.
Where to open longs?
Yes, I do believe that bullish days are on the horizon. Nevertheless, beliefs are not enough to base your trades on. Entering into longs on either bitcoin or other major alts at the current price level – around $6,400 – is not a good idea. A decent retracement would make things much easier. In general the lower side of the range offers a better R/R for opening longs.
Altcoin marketcap price action. (Source: Coinsignals.trade)
All in all, it is certainly worth keeping an eye on bitcoin and even taking some trades. However, if the uptrend continues there is lower hanging fruit available. The altcoin market is looking pretty sweet. Dangerous, but oh so sweet. As always be ready for the bull or bear scenario.