Bitcoin markets rallied again during the trading session on Tuesday, reaching towards the crucial $6000 handle. This is an area that I have been talking about for some time, because it was so important in the past. So at this point, I suspect that we are in a bit of danger when it comes to the short-term uptrend. This makes a lot of sense, because we have been so relentless to the upside.
That being said, this is an area that should be a lot of trouble, as it was so massive as far support is concerned. The fact that we have rallied like this means that we are probably due for a pullback, because not only is it a large, round, psychologically significant figure, but it is also the top of a rising channel. Overall, I think that we probably will pull back from here but it should end up being a buying opportunity over the longer-term.
Ultimately, I believe that the $5000 level will now offer a bit of a “floor” in the market. However, I think that it is going to take several attempts to break above the $6000 level decidedly. This is a major level in the marketplace, because quite frankly if we break above here we could start to go much higher. Keep in mind that a lot of people have been in Bitcoin for over a year and are completely underwater. Those people will be looking to sell at higher levels to get out without major losses. It is because of this that I do not expect the speed of the rally to come anywhere close to what we had seen during the last bubble. As you know, I am not a true believer in Bitcoin, but what I do believe in is what I see. What I see now is a market that will eventually try to break out to the upside. I have no interest in selling.