Matt Simpson, CFTe, MSTA
CityIndex
On Sunday night during quiet trade, Bitcoin rallied 7% within an hour to take it to fresh highs and see the crypto currency higher on a year over year basis for the first time since November.
Given the strength of the underlying move and the fact that, when Bitcoin moves, it can do so without looking back, we’re looking for prices to extend its rally and head for 10,000. And there are a few technical observations which are supportive of this bias.
Since April, when Bitcoin broken to 5-month high, all but one daily range at 10% or above has been bullish to underscore that bulls remain firmly in control. We can also see that bullish momentum increased as the trend developed. Furthermore, prices coiled beneath the July 2018 highs in a triangle formation ahead of Sunday’s breakout from compression, which has taken momentum back in line with the dominant trend.
Stopping just shy of 9,000 and printing a small bearish hammer on the daily chart, we’re looking for prices to consolidate above the 8,500 area before heading towards 10,000. Yet knowing that Bitcoin can defy gravity, we could seek bullish setups on intraday timeframes if it breaks above 9,000.
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