Potential signal:
- I would be a buyer of BTC/USD if the daily candlestick stays above the $121,000 level, with a stop loss at $117,000.
- The target would be the $130,000 area.
Bitcoin has rallied on Wednesday to break above the $120,000 level yet again. As I write this article, there are still a few hours left in New York trading, so I’m not quite ready to get aggressively bullish at the moment, as we have seen markets rally like this, only to give up those gains above $120,000 level. This isn’t to say that we cannot break higher, in fact, I expect that we do given enough time. However, I need to see the market be comfortable enough to close above that crucial level on a daily candlestick in order to put money to work.
Market Conditions
Unfortunately, market conditions or not the best at the moment, because we are in one of the quietest times of the year for Wall Street. I understand that most people who are evangelists for Bitcoin believe that they are differentiated from Wall Street, but they are not now the BlackRock, and several others are involved directly in this market. In other words, the idea for a Bitcoin ETF out there driving the market one way or the other for me is a very real thing. Keep in mind that those on Wall Street can provide much more in the way of volume than the average retail crypto enthusiasts, so it’s likely that we will see the reintroduction of massive volume on Wall Street in the month of September as a major catalyst.
This isn’t to say that Bitcoin can break out from here, quite frankly I would not be surprised at all. But what it does say is that the real move may take some time to play out. As things stand right now, this is a market that looks very much like a significant attempt at breaking out of range, and that “measured move” of the range could send this market toward the $130,000 level. Conversely, if this market were to fall from here, the 50 Day EMA is right around the $114,500 level and rising, and I believe that is your short-term floor in the market as things stand.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.