On the Verge
As we come back from the Holiday weekend in the US and as Lunar New Year wraps up in Asia, BTC is ratcheting higher in a choppy market. All weekend long, prices pushed towards the psychologically important 50k level, only to pull back. But each push higher made a slightly higher high, and each pullback didn’t make it as far down as the last, and so the trend remains positive.
In the early hours of the morning in the Americas, BTC prices pushed through 50k for the first time, but then quickly retreated to just under that important barrier. It is clear that there is a large amount of sell interest from profit takers and fast money traders looking to lean on that resistance. But what is almost equally clear, is that the buying interest will eventually whittle away through the resistance and we will see a leg higher, perhaps quickly, until we hit the next pocket of sellers, perhaps in the 53-56k range.
I always take weekend price action with a grain of salt, and doubly so on a Holiday weekend, and doubly again on a weekend that is also a Holiday in multiple regions of the world, as this weekend was. So, while price action was choppy but bullish all weekend, and this morning’s move was a cause to rejoice for all BTC longs, I am eager to see what happens when the US institutions get back to their desks in a couple of hours and start to get back to work after the long weekend. I will look at price action over the next few hours as a lagging indicator – either confirming the weekend trend as real and offering broad bullish support or offering denial that the weekend data really meant anything and pushing us back into the comfortable 46k-49k range that we have been bouncing around in for the past week.
On the other side of crypto markets, ETH has been strong but struggling, starting to be held back a little as price action in many of the alt coins has stalled and turned negative. It remains to be seen whether ETH can retain its strength without the tailwind of many of the alt coins that are built on the Ethereum network at its back. While these coins have been surging in recent weeks, those markets can be fickle. If ETH can stay even just relatively flat while those markets reverse and trend lower, I would take that as a positive sign. If it can’t, and it trades significantly lower with the alt coins, then it’s a possibility that the recent run has been built on a foundation of sand and not of stone.
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