Since Bitcoin hit its highs back in December it has been in a huge market correction from its highs of $20k back down to $6k. Which is a 70% Retracement. So we are still in a Bull market. At the start of 2017 the price of a single Bitcoin was below $1000, so we saw over a 2000% gain over the the course of 2017. So this pullback was inevitable. Today 3rd March, we have now broken out of this bull flag, and should it close outside of it tonight then we should see a lot more bulls come back into the market, as flags are normally continuation strategies for technical analysis. We are back to trading above the 200 day Moving average (green line) and we have a crossover about to happen with the 20MA (red line) and 50MA (blue line) which indicates we may see a strong move back up.
Unfortunately, a lot of normal working people invested in Bitcoin when it was at $18-20k due to its fall being so big most of these investors have now been flushed out the market and the financial institutions have now come back in long positions as they didn’t want to buy at the prices retail investors bought at. A lot of these institutions shorted Bitcoin when it was introduced to the futures market mid-December, so they drove the price back down to get in buy positions. This is a clear indication that Bitcoin is here to stay. Even Mark Carney announced the fact that Cryptocurrency is here to stay in a speech yesterday but needed to be tightened regulation on its adoption. Which we all know it is what is needed in order to provide consumers protection.
So back to the charts…… If we look at the RSI chart on Bitcoin, it stayed at the over 70 level (meaning overbought) a lot longer then it stayed in the 30 area (oversold) we are now following a nice trendline up on the RSI.
So my first target I be looking at Bitcoin to get too where people may take out some long profits is at the Monthly R1 level which is $12750 before we could see it pull back to define a lower high. So long term targets is very hard to define on Bitcoin as we don’t have much history and at the moment its still speculative. But looking at the Blockchain technology behind it, the number of high level people and companies adopting this technology it is the future. I would expect it to go up and beat previous highs set at the back end of last year. Based on the technical analysis of a bull flag we could see 24k reached (end of the flagpole).
It looks very optimistic for Bitcoin and its future, every time the market says its going to the moon it falls, every time people say Bitcoin is going to zero it goes up. So be careful as to when you buy.
If your investing in Cryptocurrencies then please beware, there are a lot of dodgy coins out there and ICO’s also that may be some or very weak business models. Take the time to do your research, we offer a cryptocurrency course that provides this help and guidance through our weekly webinars a share of our knowledge.