Bitcoin Is A Free-Floating Monetary Good, It Moves When Its Users, People, Decide
Bitcoin Is A Free-Floating Monetary Good, It Moves When People Decide
Bitcoin went straight up from $4,130 to above $5k yesterday in an hour with no apparent catalyst in sight. This 20 percent surge couldn’t be defined by any news which as analyst says has been just a technical move.
According to Jake Chervinsky, a government enforcement defense & securities litigation lawyer at Kobre and Kim firm, being a free-floating monetary good, Bitcoin's value depends on the supply and demand forces of the market. This means price moves when people decide it should move.
“Bitcoin is a free-floating monetary good. Its value depends on market forces of supply and demand, which are dominated by the whims of human psychology.”
Price movements often can't be explained by news events. The price moves when and how we decide it should move, end of story.”
But Where to From Here?
According to Magic Poop Cannon, the major resistance is coming ahead in the $5,777 and $6,116 zone.
By crossing the $4,100 level, Bitcoin has been able to surpass the upside resistance and from there we had a quick “explosion” to the upside at above $5k. As for calling out this move, Magic says, “that there is not really any resistance above the pink neckline of the inverted head and shoulders pattern.”
He further explained that when the price was free falling from $6k, it fell in a linear way. The market at that time was in “freefall” which he says showed that there was very little support around $6k and $3k. “If there is little support during a fall, there will be little resistance on a rise through the same area.”
The breakout came with a volume that is about four times the average volume. Additionally, price exploded through the 200 EMA. If today the price closes above the 200 EMA, it will be the first time since last July. Currently, the price is destroying the resistance.
Looking at the current chart, he says Bitcoin is doing the exact opposite of what it did when it fell from $6k. To solidify this he says, we need to see consolidation here. If BTC consolidates, it will continue higher to the 61.8 percent that will see it reaching major overhead resistance at $5,777.
In case BTC is not able to hold above 200 EMA and don’t consolidate here, Magic expects price to find support at $4,100 that it just broke above.