Bitcoin Tops $6,500 At Last, Many Bullish
Wow. In what can only be described as jaw-dropping, Bitcoin (BTC) rocketed pass $6,300, $6,400, and $6,500 in rapid succession on Friday. By the looks of it, $6,600 might just be on the horizon. For some reason or another, buying pressure has returned to the cryptocurrency market in droves.
While some cynics have argued that Bitcoin is rallying too fast and too high for its own good, some are sure that BTC’s technical set-up still is looking entirely bullish.
David Puell of Adaptive Capital, who last week postulated that BTC was trading in a clearly bullish broadening ascending wedge, explains that the cryptocurrency is literally going short-term parabolic. In fact, Puell defines Bitcoin’s recent price action as “vertical,” accentuating that bulls are truly in control.
He adds that with the number of short positions on both Bitfinex and BitMEX continuing to rally to new year-to-date highs, the potential for a short squeeze has boomed. Puell notes that if BTC hits $6,400, as his parabolic model foresees and as the cryptocurrency did earlier Friday, “a perfect blow-off top” could form, whereas shorts are squeezed, and BTC rallies in a 2017-esque fashion.
Others would agree. Financial Survivalism, who once revealed a model that saw BTC falling to $800 in the current cycle, explains that Bitcoin’s 10-minute chart is currently shaping up to be a short-term Hyperwave. As this form of technical analysis predicts, BTC could see a vertical rally to the high $6,000s, and then may see a near-vertical drop back to the $5,000s.
Not Decidedly Bullish Yet
BTC may not be ready to go to the moon, however. Popular Twitter commentator Credible Crypto recently remarked that per the Elliot Wave Theory, a form of technical analysis, a move lower (retracement) of 23% to 38% may be inbound.
And as Nunya Bizniz points out, Bitcoin has only been above its 50-week moving average, a key long-term level of both support (in bull markets) and resistance (in bear markets), for one and a half weeks. This, while bullish, is not a sign that a parabolic move is incoming, and instead may be a sign of a fake out.
Yet, Bizniz adds that since four weekly closes above the 50-week moving average has “never failed to initiate a bull market” throughout Bitcoin’s history, continued bullish price action may just be what the cryptocurrency needs.
As Murad Mahmudov of Adaptive Capital pointed out in a recent interview with Cheddar, the fact that BTC has continued to move up and up, despite news of the Tether and Bitfinex debacle and the hack of Binance, confirms to him that a bull cycle is on the horizon. But will Bitcoin be able to close above its 50-week moving average four weeks in a row? At this point, bulls can only wait and see, and, most importantly, hope that historical precedent is followed this time around.
Title Image Courtesy of Cristian Escobar Via Unsplash