Bitcoin initially pulled back just a bit on Monday but found $60,000 to be supportive. Furthermore, the market rocketed to the upside to break above the $66,000 level. Now that we have done this, Bitcoin has confirmed the bullish flag and is threatening the all-time highs at the time of writing. The market has been very bullish for some time, but just took off on Monday to finally break above this short-term pullback.
When you take a look at the candlestick, it is very likely that the momentum will continue to push to the upside. This is not a huge surprise considering that the US dollar has gotten absolutely hammered, and this is a market that had spent a couple of weeks digesting the huge move higher. When you look at the bullish flag, the pole of the flag measures for a move towards the $85,000 level, and after the momentum that we had seen thrown into this market during the day on Monday, that is not a real stretch of the imagination. I think at this point Bitcoin is going to go much higher. That being said, it does not necessarily mean we will get there overnight.
The 50-day EMA sits just below the $55,000 level, and it certainly looks as if it is going to continue going higher. The $60,000 level will more than likely now offer support and could be a bit of a “floor in the market” going forward. Bitcoin does seem to acknowledge the markets in $10,000 increments, so it all ties together quite nicely. I believe at this point you have to look at the possibility of almost any pullback in this market as being a nice buying opportunity, and I think most people would recognize that as such.
On the other hand, if we were to turn around and break down below the $50,000 level, then it is possible that we could enter a much deeper corrective phase. That being said, the technical analysis right now suggests that we are quite some time from making that happen, so I believe Bitcoin will continue to attract more flow, especially now that we have the ETF available for Wall Street traders, and by extension retirement accounts.
