Bitcoin markets had a very strong session during trading on Friday, after the jobs number came out, and there was a general “risk on” feeling around the world. With that being the case, the market gained over 4%, slamming into the top of the channel we have been trading in. Quite frankly, we got here a little quicker than we anticipated, so this point a pullback would make some sense. The market pulling back though should attract a lot of value investors, as the market has clearly shown its proclivity to go higher. Ultimately, it’s now obvious that we have formed a bit of a bottom, so I believe that we are starting to get more traders in the marketplace feeling as if they need to get involved.
Any pullback at this point should be thought of as value, because not only do we have the obvious channel, but we also have the $5000 level underneath which of course should show a certain amount of support, because of the large, round, psychologically significant figure. Beyond that, we also have the 200 day EMA which of course attract a lot of longer-term money into the marketplace.
That being said, the $6000 level above will continue to be a bit of an issue, so don’t expect this market to suddenly collapse due to that level. I think we will have to bounce off the $6000 level several times, as it will take a significant amount of momentum to finally break out above that level. It was massive support under the previous consolidation area as you can see on the longer-term charts. If we do break above that level, then the markets will enter a whole new phase of bullishness. As things stand now though, look for pullbacks to offer value.
