Bitcoin looks set to take another leg higher and likely bring alts with it as it approaches the apex of a three-day wedge, with some alts taking the opportunity to make considerable gains. However, with Bitcoin about to make a move it might be wise to hold off on alts in case Bitcoin rejects off the resistance level.
Bitcoin Approaching Wedge Apex
Bitcoin has been coiling inside a wedge for the past three days on the hourly timeframe, ever since its $500 increase on Monday:
The fact that it has entered this wedge on the back of a price rise is a positive sign, as is the fact that the RSI has reset to 50 from highs of 78 this week. The pattern is similar when viewed on a higher timeframe, suggesting that Bitcoin is ready to make a move very soon either way, as can be seen from this four-hour chart:
$8,000 is Key Area
Bitcoin has struggled to get past the $7,500 region ever since being within touching distance on Monday, and doing so now would put it in great stead to reach $7,600 and fully erase the losses made when it collapsed to $3,850 last month.
The ultimate bullish sign would be if Bitcoin can reclaim the $8,000 in short order, as this would set us right back on the path of the nine-year logarithmic growth curve:
Alts Enjoy Brief Run
Alts meanwhile have been enjoying life while Bitcoin remains quarantined in its wedge. XTZ and LINK in particular have registered notable gains, while other alts such at ALGO have also been slow burners over the past few days.
Alts still seem correlated to Bitcoin in the main, meaning that any big moves from the market leader will still have an impact, positive or negative, on alt setups. Those entering alt trades therefore are advised to have tight stop losses in case Bitcoin falls out of the wedge rather than busting up out of it.
There will be plenty of opportunities to make money on alts in time, so there’s no need to rush into risky trades with Bitcoin about to move.
