Bitcoin broke out on Wednesday, eclipsing the $50K level and surging late into the day, finally closing the trading session near the highs north of $52K. This is an extremely bullish candle as BTC breaks out higher again, forming a new ATH and impulsively rallying above a major resistance level and a significant checkpoint on the way to $100K and above. Bitcoin is starting to turn heads.
(February 17, 2021 8:30PM EST)
Primary Outlook:
Now that Bitcoin broke above $50K and closed over $2K higher, clearly validating this breakout and breach of resistance, Bitcoin invalidated my alternate view that Bitcoin's W1 had terminated and was setting up for a W2 correction back down toward $40K. Now, we are waiting for signs of a top of this impulsive wave -- and enjoying it might I add -- which we can then use to determine the depth of a subsequent W2 correction. If BTC tops around $60K, then a pullback to about $49K or maybe even $42K might make sense, though it really depends on the length of this current rally.
Strategy:
In the meantime, we are simply in a buy the dips and HODL mode as Bitcoin grinds higher.
The fundamentals continue to be driven by institutional demand that exceeds the daily amount of Bitcoin mined (PayPal), programmatically decreasing monetary supply (next halving in May 2024), fiat inflation at the biggest scale in history (22% of US dollars ever printed were printed in 2020), and a wave of institutional investors are now entering Bitcoin positions for the first time (BlackRock, BNY Melon, Twitter, Motley Fool, etc.).
Traditional Markets
In traditional markets, gold continues to fall, now below $1,775 as the floor gives way. , which is interesting given Bitcoin's bullishness. $1,760 or so has been quite supportive for gold recently so if gold finally finds a floor soon, if it hasn't already, this could potentially setup further correlary support for BTC.
Support:
Look for tentative support at the $50K level, then ~$40K/$42K which should offer plenty of support.
Resistance:
Look for resistance at $55K which roughly equates to a $1 trillion market cap for Bitcoin, which might actually be a bullish trigger for a wave of new institutional investors, then $60K, then every $10K until $100K.
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