- Bitcoin hit $19,445 yesterday, just $221 short of its all time high on Bitstamp
- It retraced overnight to $18,642, resulting in a clear short term resistance line, which it seems to have broken
- A retracement to the low-mid $17,000s is on the cards if Bitcoin cannot maintain its momentum
Bitcoin pulled up $221 short of its all time high yesterday, suggesting that a breakthrough looks imminent following an almost three-year wait. After clearing $19,000 early in the day, Bitcoin pushed up to $19,445, just $221 shy of the Bitstamp all time high of $19,666, but was unable to cross. Holders are now nervously watching the drop that has followed to see whether $19,445 represents the top of this run or whether Bitcoin has enough gas in the tank to try again.
Rejection Leaves Clear Short Term Resistance Line
After putting on over $1,000 yesterday and topping out at $19,445, Bitcoin fell overnight to $18,642, leaving us with a clear short-term resistance line. However, Bitcoin looks to be making a good go of overcoming it:
Given that the $19,500-$20,000 area is one of huge psychological significance, we cannot expect Bitcoin to burst through in one go. We can look back to December 2017 and Bitcoin’s price action around $10,000 (an all time high at the time and arguably bigger psychological barrier) for examples of what can happen at such crucial points:
We can therefore expect some huge volatility around the current price, although in order to maintain its uptrend Bitcoin needs to hold the following range:
Holding above the top box would represent a clear support/resistance flip which would be exactly what Bitcoin needs to launch another assault on all time highs. Operating within the range would represent a more concrete rejection and would likely see some further ranging while Bitcoin gathers steam for another push. This could relieve some pressure on alts which have taken a hit during Bitcoin’s move before Bitcoin is ready to try again.
A 4hr close underneath the bottom red box would be bad news in the short term for Bitcoin and would likely see it revisit the mid-low $17,000s before considering another attempt. This would also lead to double digit crashes for alts across the board.
Bitcoin Rush Breaks Binance Trading Volume Records
There are good reasons for bulls to be optimistic that the drop overnight is just a bump in the road. Media exposure of Bitcoin’s run is increasing, which is resulting in Twitter followers of Coinbase and Binance growing. More importantly, the run to $19,445 yesterday saw Binance smashing all time highs on trading volume, which is incredible considering the hype that was circling in 2017.
In the back of everyone’s minds however will be the fact that Bitcoin is coming off an extended run from $13,000 just a month ago, and a 20-30% correction just before all time highs would be the perfect way for the markets to wreak their revenge on exuberant bulls.
