Bitcoin enthusiasm is sweeping the globe. Price behavior over the past three months for the first-ever-known cryptocurrency has been in a word – spectacular. No longer is the diatribe about more winter, but more about springing into the upper realms of paradise once lost. The general agreement now is that a firm bottom of $3,100 was formed in late December and that Bitcoin is now poised to ascend beyond $6,000, an original key level that was once support, then resistance, and now, once more, to become support again.
Irrational exuberance, the oft spoken phrase by Bitcoin critics, may be present to a degree. Analysts, who were once silent, as if hiding away in hibernation in some distant cave, have suddenly come to life again. Yes, the more excited of the group have postulated destinations that are far too difficult to accept, pushing the boundaries of five and six-digit figures, but the vast majority of analysts with sane and sound minds have suddenly focused on the “doable”, the psychological barrier of $6,000.
George McDonaugh, CEO of London listed digital asset investment company KR1 plc, is representative of a consensus of the group:
It is clear that the $6,000 level in Bitcoin is a key price point to overcome in order for this recent strength to be maintained, as this is the price that acted as significant support for a number of weeks in latter part of 2018. Breaking below it was a watershed moment that then saw the price fall off a cliff down to $3,100 in December as the ‘crypto winter’ was at its height.
McDonaugh goes on to explain:
As Bitcoin edges back up, that previous $6,000 support level has now turned into resistance and is now firmly in the spotlight. A move back above here will bring the $10,000 level back in focus. I think breaking through it on its first attempt anytime this month is unlikely. What is most likely to happen is that it will test $6,000, fail and head back down back towards $4,000. I would expect the price to break through $6,000 on any second or third attempt and from there the aim would be to get back to $10,000.
But he is not alone, and $10,000 is conservative in the scheme of things. Here are a few comments from his other analytical brethren in the ecosphere:
TradingView: “Bitcoin did what many had been waiting for over the past week – break resistance and surge to $5,640. In typical fashion this happened within about an hour during the Asia trading session late this morning. The move puts BTC up almost 7 percent today as that fabled ‘golden cross’ finally comes into play. Next stop will be $6,000 if the momentum can continue in Europe and the US today.”
Omkar Godbole at CoinDesk: “Bitcoin’s 14-week Relative Strength Index (RSI) has entered a bullish territory, all while BTC has broken out of a falling channel. BTC is ready to rise to the former support-turned-resistance of $6,000 over the coming weeks and months.”
CryptoRand, a popular trader: “As BTC has stagnated over the past week or so, it has entered a “bullish pennant” pattern, marked by a tightening range and higher lows. If the pennant plays out as technical analysis bibles expect, Bitcoin will soon see a massive breakout higher, potentially over the $6,000 region.”
Dr. Craig Wright: “Bitcoin’s logarithmic weekly chart is currently expressing a strong bullish divergence and bull flag. E move to $6,250 could come to fruition in the short-term.”
Lisa Edwards, crypto analyst: “Strong bullish divergence & BULL FLAG formed, SHORTISH TERM – $6,252, MID TERM RETRACE – $4,734, LONGER TERM – $10,444, POSSIBLE RETRACE $5,161 Bitfinex, A tiny drop overall to the possibilities ahead;
BTCNews: “While looking toward $10,000 so soon after a long, gruesome bear market may seem overly bullish, given the fact that Bitcoin price can skyrocket so quickly due to its scarce supply, and with so much capital sitting on the sidelines in the crypto space, a strong enough break of $6,000 could cause widespread FOMO, as the bear market bottom will likely be confirmed, and the case for a new bull market will be all the talk across the industry.
Nick Cawley of DailyFX: “A bullish pennant is forming on the daily Bitcoin (BTC) chart which may suggest another break higher and back above $6,000.”
Why such consensus, and what are these analysts seeing? This chart tells the story:
This daily “BTC/USD” chart, courtesy of DailyFX, embodies a number of positive signals, ones where the odds favor a strong upward move. The “Pennant/Flag and Pole” formation is self-evident at the right of the chart, signifying that a thrust up is imminent. The 20-day moving average also just crossed the 200-Day MA, the fabled “Golden Cross”, which signals the same event. The CCI indicator in the bottom portion has also moved out of the overbought area, signaling that consolidation is over and the time is right for a strong move again. Lastly, the chart depicts the support that formed at $6,000 from August through October of last year, only to turn into resistance in November.
Crypto enthusiasts are beside themselves. It has been quite a while since the “stars” lined up so convincingly for good providence ahead, but technical analysis in the nascent crypto space is, at best, only a minimal measure of investor sentiment, due to the lack of broad-based participation in the market. Critics still predict pullbacks to $4,200, but, as Clem Chambers, the chief executive of ADVFN, states:
The passion for crypto is still here and is not going away.