Bitcoin Rallies Above $28,300 – Is This The Peak?
We hope you enjoyed the brief holiday break… it seems Bitcoin has been busy while the markets have been resting! Bitcoin enthusiasts are adamant that the price rally has just started a parabolic move higher. From a technical standpoint, this current rally certainly appears to have gone parabolic. As any trader already understands, what goes up may eventually come crashing downward.
My research team and I believe failure at the current highs would represent a clear technical divergence pattern between price and the RSI indicator. Additionally, the current rally that started on December 20 consists of a $10,850 rally phase. The previous rally that took place from October 20 to December 2 consisted of a $9,200 rally phase. We believe this current rally phase from December 11 could be a Wave 5 rally (almost equal to the Wave 3 rally range). If our researchers are correct, this final rally phase could come crashing downward after reaching these peak levels above $28,000.
This 4 Hour Bitcoin chart highlights the incredible price rally that has taken place over the past 16+ days – a rally of over $10,000. It also highlights two very clear price rally phases – creating an A-B-C price wave pattern.
This Daily Bitcoin chart highlights the two, almost identical in size, that we believe has created a price peak above $28,000. It also highlights the technical divergence between price and the RSI indicator in the lower pane.
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We believe this current peak may become a near term top in Bitcoin – possibly resulting in a downward price decline. Critical support near $18~$20k is still very valid. If Bitcoin prices collapse from these peaks, we believe the $18k to $20k level will become the next level for price to find support.
Overall, this incredible rally in Bitcoin prices before the end of 2020 has certainly proved the Bitcoin skeptics wrong and set the enthusiasts on fire. At this point, we get to see what happens in early 2021 and if this $28k level will hold up. One thing is certain, the past 30+ days have shown a massive rally potential in Bitcoin and other Cryptos – is this an excess phase peak or the start of a massive uptrend in 2021?
Our proprietary BAN (Best Asset Now) strategy allows us to know which assets are potentially the best performers in any type of market trend. If you want to learn more about how we can help you with our proprietary tools and strategy then go to www.TheTechnicalTraders.com to learn more. Sign up today to get my daily pre-market analysis of the markets that walks you through the technical indicators of Bitcoin and the major asset classes.
Stay healthy!
Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com
