Last week we saw a sharp Bitcoin drop from $20,000 to $10,700 where it founds support on the long term trendline which you can see below.
On December 22, Bitcoin fired off the trendline and jumped back to $14,850, but only for a short period of time. It dropped from that point to $11,600 just to form the double bottom. As you know, that is a strong reversal pattern, so the result was another BTC jump which is still happening.
Double bottom is confirmed today when BTCUSD managed to rise above $15,000 – a point from which it dropped the last time. Right now Bitcoin is facing an intraday resistance level near $15,640 and perhaps it will retrace from there to some of previous intraday support levels (maybe to $14,800 or so) before it continues up.
After that BTC should continue its recovery to one of the most important levels right now. That is $17,000. If it manage to reach it, BTCUSD will form the head and shoulders pattern. Below you can see how it would look.
Many experienced traders expect this scenario and talk about it on Twitter:
— Peter Brandt (@PeterLBrandt) December 23, 2017
While I appreciate Peter Brandt, I’m still bullish on Bitcoin and think that the scenario you’ll see on the next chart is more possible.
Don’t forget – this is Bitcoin and there is still a lot of room for growth. The market is blooming, every day more and more people are joining and bringing in fresh money. It is very possible we’ll see $100,000 in 2018. But before that BTC should make a double top pattern if it reach $20,000 again. There it should face some sellers pressure, but as always BTC should overcome it and make a new all-times high near $24,000 – $25,000.
So, what you should do next?
If you’re hodler, just do as always. Hodl your BTC and you will be good. In case that you’re a trader you can try to sell your BTC on critical points with a goal to buy more when price corrects. Watch at higher time frames charts like 4h to get a better idea what’s going on and try to sell when you see some bulish patterns. Buy back Bitcoin after that quickly, because you don’t want it to go up without you.
Maybe even better idea is to get an account on Binance.com -a great crypto exchange with many altcoins which are bullish against Bitcoin. Pick some of the most popular alts, invest in them and make more BTC while it is growing against USD.
Be careful and always use stop loss. Happy trading!