- Bitcoin has enjoyed a stellar October, but the run looked tapped out after four weekly green candles
- Five weekly green candles rarely happens outside of unusual circumstances
- A pullback to $12,700-$12,900 would not be unreasonable before $14,000 can be tackled again
Bitcoin could be in line for a reversal following four weekly green candles before continuing its upward momentum. A reversal to the middle of the eight-month channel is likely before another assault in $14,000 can begin, with a daily close above $14,300 potentially invalidating this.
Bitcoin’s Blistering October
Bitcoin has enjoyed a blistering October, during which it has taken out last year’s $14,000 high, but following such a run it looks a little out of steam:
Rarely does Bitcoin experience a fifth weekly green candle in a row outside of parabolic moves like in December 2017 or when there has been considerable prior downside, as in March this year. In all other scenarios, four in a row is unlikely whereas five in a row is almost unheard of, and already the week has started with a topped out look.
Correction to $12,900-$12,700 Possible
It would be healthy therefore for Bitcoin to correct at this point, and we can look at the daily chart to get a clearer picture of where it might retrace to:
As we can see, Bitcoin has been in an upward channel going back to the 51% crash in March, with the weekend push to $14,100 almost taking us to the top of that channel. It would be feasible then to think that a pullback this week to the $12,700-$12,900 region is on the cards before $14,000 can be convincingly taken out, which would take us up to the $17,000 region.
This thesis would likely be invalidated if Bitcoin closed the day above the trendline at around $14,300, in which case a rocket propelled move to $17,000 before a more violent correction could be on the cards.
