In the latest article it was stated:
“If price gets back above US$270 and takes out US$273, a run for the US$290-$300 area is the next target. This is major resistance and as has been stated many times: if price fails to break this area, expect major downside. It’s also possible that US$300 gets taken out and overshoots to the US$320-$330 level. This is a target that has to be taken out for a true bull run to start, which the price hasn’t yet been able to reach.”
The Bitcoin price is back above US$300 where it hasn’t been since the summer’s Grexit fiasco. This has been a strong up move, in which the last 7 days have been positive (green candles). This type of price action has not happened in a long time. The 50 day EMA also looks poised to crossover the 200 day EMA, although this has not happened yet.
The price has surpassed the 300 major resistance level, which it did with surprising ease and continues higher into what may be a big blowoff top. According to investopedia, this is when a chart pattern indicates a steep and rapid increase in price and trading volume followed by a steep and rapid drop in price and volume.
Let’s focus on the indicators to show why this is looking likely. The chart below will blow up a bunch of the indicators to show they are climbing into extreme positions. If we are forming a blowoff top this will continue longer than it should and drag people in as they develop a “Fear Of Missing Out” (FOMO).
In the above chart there is a red vertical line, which shows where all the indicators were during Grexit right before the price collapsed. In this recent move up, all of the indicators are in a more extreme position than they were during Grexit. In this case, they look poised to keep moving higher even though they are elevated. As this happens without stopping to consolidate more and more buyers come to the table causing the price to rise even further.
This could lead to a blowoff top and the price collapsing as the move gets more extreme. However, it’s hard to tell right now at what price this could happen. Prices tend go higher than one thinks they will and fall lower than one thinks they will as well.
For now, the trend continues up and is looking very strong. Watch those indicators for signs of more strength before divergences become noticeable.
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