The bull trend continues strongly. The break of $10.5k level was a solid breakout like I wrote on the previous analysis. I’ve been writing about the importance of this $10.5k level for a long time and it is still relevant in the sense that the next pullback might hit it. Let me explain this better with a chart.
Weekly chart. Weekly bar hasn’t closed this high since January 2018. Next resistance higher is the 2018 yearly open at $13880. Weekly RSI (relative strength index) at the bottom of the chart is above 70. If the price hits this week the big yearly open resistance while the RSI is above 80 or even better above 85, then we may need a breather. This would probably mean quick retrace to $10-10.5k level.
If we rise slower to the 2018 yearly open, then there won’t necessarily be any kind of deep retrace, but price probably just consolidates little bit before breaking the yearly open and then rise will likely accelerate to $18k-20k before a deeper retrace. In this case retrace would likely be to 2018 yearly open.
On the daily chart the RSI already went once very high and now is above 70 again going higher. When weekly and daily are both high >85 it’s a good sign that we are rising too fast and need a breather especially, if we are hitting a major resistance like yearly open at the same time.
When I talk about retraces it means, that the bigger trend is very bullish. Like I have been writing lately, the bull market seems to be strong and this rise won’t stop before it’s way higher than the ATH (all time high) price of $20k.
All the important moving averages are pointing up and are in the right order from shortest to longest. This is a good sign that the long trend is up. But there will be scary and fast dumps (retraces / pullbacks) along the way.
Now we would have to drop below the $10.5k level to make me start to think about bearish scenarios.