It sure looks like bitcoin is back baby! There’s still work to do but it’s feeling more and more like the worst is now behind us. We’ve come hard off the bottom at $9200 on good volume. BTC has retaken the $11,600 level we’ve been talking about since the beginning of the turnaround and is now up against $12,700.
It’s first challenge here today was unsuccessful but the pullback from it wasn’t severe and price has already turned back up. Obviously we always want to see price levels like this broken and then confirmed with 1hr, 4hr and daily candles but if I had to bet on that happening I surely would.
After a break and confirmation above $12,700 there are a few price levels of smaller significance at $15,000 and $16,500 but the big one is $17,250.
Ethereum is looking to build strength here and undo some damage from the past week. The 8 day moving average is above at $1150, so a daily close over that is important to keep upside momentum going. Like LTC, Stoch RSI has turned positive on the daily and while MAC is still rather bearish, that will take a few bullish day to correct since the recent price decline was so steep. Above the 8 day, ETH longs will want price back above $1280 to negate the control the Jan 16th candle has on the chart. Once this is achieved, new all time highs are very close. I remain long ETH and have added over the past few days.
The bitcoin bounce has lost some of its oomph already. While it’s certainly not over, I would’ve expected more. The follow-through buying that we talked about 12 hours ago dissipated throughout the day and we closed the daily with a red doji. So now we have a double doji! This is perfectly normal in a bottoming or topping market as participants are indecisive and price is left mostly unchanged at the end of the day due to relative market equilibrium. One doji is neither bullish nor bearish, so two in a row is certainly no clear indication either.
What are we looking for now? Bears will want BTC below $10,500 to trigger a retest of the lows at $9,200. Bulls will want price above $11,900 likely causing a test of the overhead resistance at $12,700. We could get one or the other, neither or both. If we do head lower I believe BTC won’t be there long as it’s feverishly bought up in the $9,000’s causing a quick snap back and rally higher.