Bitcoin Jumps to $9,850, Once The Looming $10k Price Is Broken, “We Are Off To The Races”
- The ongoing bitcoin move is healthier” one and easier to long.
- “Expect to get a nasty pullback soon,” – economist and trader Alex Kruger
- But the 200-DMA points out the trend has officially changed
The crypto market is ecstatic with greens as Bitcoin surges to $9,853 level on the back of the strong volume. In the past 24 hours over $1.37 billion worth of bitcoin changed hands on top ten exchanges with real volume.
However, as we have seen since last year, there have been a lot of pumps and dumps in the bitcoin price. In April, we jumped 18% overnight which wasn’t followed by a pullback. Then in June, after a 15% pullback, BTC price went straight 80% up to 2019 high $13,900. Other such pumps were seen in August and the President Xi Jinping driven pump in October.
Bitcoin yet again started January on a bullish note as the digital currency reacted to US-Iran news but we have also been seeing pullback after every 10 to 20% move up. But now, the ongoing movement, economist and trader Alex Kruger says is a “healthier” one and easier to long. He said,
“Someone is always pumping, nobody uses magical internet money for anything, trading activity is entirely speculative, and mostly short term…this still is the healthiest of all big moves in the last year, pumps with pullbacks, leaving structure behind.”
Crytpo is bid. Period. Hearing more and more inquiry. Always dangerous but higher prices are making me more bullish. $eth over 200 for a couple of days will open a bigger move. $btc has 10k looming. Once that goes we are off to the races.
— Michael Novogratz (@novogratz) February 6, 2020
Nasty Pullback Soon
This time Kruger explained the larger time frame is of H&S, “bottomed against 2018's key level.” The hike in BTC price is also on high volume that is followed by healthy pullbacks.
Also, this year we are witnessing reward halving and bitcoin being a digital gold narrative picking up, with some like former eToro analyst Mati Greenspan believing people’s trust in Fed is losing as they force investors into a high-risk corner, pushing them to jumping into Bitcoin.
— PlanB (@100trillionUSD) February 2, 2020
In the short term, “Expect to get a nasty pullback soon and I'm again net short from slightly above (with stops around 9800),” said Kruger but bigger play he said is long.
However, investor and trader Josh Rager says Bitcoin bears are in denial. The trend he says has officially changed.
200 DMA Screaming an Uptrend
Looking at the best representation of the long term trend, the 200-day moving average is painting a bullish picture. On Jan. 28th, Bitcoin broke above the 200 DMA calculated at $8,903 which has been a ‘significant bullish signal,” noted Greenspan, founder of Quantum Economics.
“No Asset Follows Trend Better than Bitcoin,” pointed out Matt D'Souza, co-founder of Blockchain Opportunity Fund last month.
He explained how during the last bull market mania, Bitcoin closed above its 200 DMA in mid-October 2015 and did not close under it until May 2018. For 846 days, the flagship cryptocurrency maintained its long-term trend.
During the crypto winter in 2018-2019, Bitcoin closed below its 200 DMA on March 14, 2018, and did not close above it until February 2, 2019. This has been a long-term trend of 384 days. D'Souza said,
“Just like any asset, Bitcoin experiences intermediate-term retracements against the long-term trend (intermediate-term correction in a Bull Market or intermediate-term rally in a Bear Market). Overall, Bitcoin is a Trend Followers Dream.”
In 2019, Bitcoin topped out at about $13,900 and has been correcting for 206 days. A long, healthy correction like this he says is good for the price because “the longer the base, the higher in space.”
D'Souza is not alone in observing that historically bitcoin has reacted strongly once we have broken above this. As we reported, Fundstrat’s Tom Lee also said recently that this trend is followed by an average increase of 197% in price.
Veteran trader Peter Brandt who has been calling for $5,400 in June says those waiting for $6,000 have “missed” their opportunity and “The weak hands are out; the strong hands own it.”