Bitcoin pushes bears aside, ranging within a $500 band – What’s next?


Bitcoin

Bitcoin is the most exciting thing going in investment circles these days. Crypto enthusiasts are beside themselves with glee, having endured a Crypto Winter that they will surely tell their grandkids about, and now celebrating the good times, as if they have no end. But do they? The proverbial question must be asked – What’s next? Bitcoin has rocketed past its December low and posted a gain of $2,000, a remarkable 65% return in only four months. Rapid rises like this one tend to be unsustainable, but hopeful analysts still see $6,000 in the near-term future before another round of profit taking.

In April alone, BTC cruised from $4,100, through the mythical $5,000 barrier of psychological resistance, only to bounce off $5,400 before retreating. It has been in range mode ever since, oscillating between tight boundaries of roughly $5,000 and $5,500, while analysts try their best to forecast what might be down the road. One analyst by the name of Nicholas Merten, also known as “DataDash” on social media, believes he has a reasonable answer as to what the near-term future might bring. In case you are curious, he has 313,000 avid subscribers that follow his every word, and he is now seeing $6,000 as the next stop before a meaningful pullback occurs.

His recent communiqué reads:

What I like is, even though we did have a pretty sharp sell-off here, we can see that as much as it was a pretty steady amount of sell side action in the sense of price, volume at least on liquid exchanges like Coinbase, Bitstamp, Gemini, you name it, was nowhere near the buy side activity that we had these two days. So it’s really good to see that the market isn’t breaking through that even level. We were actually able to come back up and the actual close was above $5,000 and we’ve continued to regain some of those losses.

Unlike other analysts, Merten is willing to specify a timeline:

What’s the time frame for going to $6,000?… I think it could be by the end of this month. With the kind of momentum that’s come in – the fact that we’re holding $5,000, this serious level of gains. And we’re not even coming down to retest on the 200-day. This tells me two things. It tells me that there’s short-term confidence. There’s short-term risk taking. But at the same time, this is going to get over exhausted. We’re making support roughly, if you can take a look at the RSI, we’re basically making support on the overbought range. And to me, that tells me in the short term there’s going to be continued speculation.

For those with short memories, $6,000 was a key level of support in late 2018, during Bitcoin’s plunge from the upper atmosphere. Many analysts lost a few subscribers when they were certain that $6,000 would be a formidable bottom, but then November came and destroyed those predictions in quick haste. Now that BTC is below that level, the analyst community views that plateau as an extremely tough nut to crack, since it now poses as, once again the phrase, “formidable” resistance.

Merten agrees:

I don’t think we’re going to have enough substantial risk taking, especially with not only how fast this rally has been but also with where we are fundamentally in markets, to climb above $6,000. I know a lot of people want that, I just honestly don’t see it happening… So I think we’re going to get up to around $5,800, $6,000, and then we’re going to come back down and set a third higher low, possibly in this case somewhere around $3,700 to $3,800, sometime in May or June in this case.

Merten also claims he will become an optimistic buyer again at the $4,200 level. For the time being, Bitcoin just clawed its way back over $5,200 in today’s trading. As for what’s next, human behavior can never be predicted, and for that reason, even the best predictions can fall flat. Caution is advised.

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Bitcoin pushes bears aside, ranging within a $500 band – What’s next?

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