Bitcoin Fakeout to Breakout

04/03/2020

Trade ideas and market discussion can be found on our Public Discord Channel: https://discord.gg/akcgCVP

We were watching Bitcoin yesterday on the Discord channel, and it seemed like price was going to break out. This is a great lesson on patience and waiting for trigger signals. Price action did show a break above this level, but before the candle closed to confirm the signal, we sold off and closed UNDER the resistance zone of 6870. Twelve hours later, we finally got the break and closed above the resistance zone.

This level is significant. You can see it provided resistance for us for quite some time and price tested this level but failed to break out many times these past few weeks. If you look back, this zone is also a large flip zone, a zone that has been both support and resistance in the past. Again, a very important zone.

As I am writing this, and as you can see from the charts, we have broken above and are currently retesting the breakout zone which is normal price action. From here, we will either move higher, ideally creating a new higher low to work with, or we break and close below this 6870 resistance zone, creating a false break out or fake out. Remember, the crypto markets are open 24/7, so this can play out on the weekend or even next week.

Many of the other cryptocurrency charts are showing this similar pattern, and some are still testing the resistance zone. They have not yet broken out. Will Bitcoin be the leader as many crypto traders say it is?

Bitcoin has never been recession tested. The Bitcoin bulls speak about how Bitcoin is a risk off, safe haven asset, a digital gold. However so far, Bitcoin has not acted like a safe haven asset. To be fair, if we do see talks about a digital currency being implemented, perhaps decentralized crypto coins can be seen as a good investment to be able to hide your money from the government. Or, if we do see a currency crisis, anything other than fiat could get a bid. Time will tell. But at this time, and as a trader, I will be watching this break to see if we will not be beginning an uptrend.

 

Related Posts

Latest Post

Leave a Reply

Your email address will not be published. Required fields are marked *