Bitcoin (BTC): The Running of the Stops

We see two dominant themes running through the crypto markets. The first is the 4% swings in Bitcoin (BTC) feels like it is frustrating both bulls and bears Bulls who chased Bitcoin (BTC) above 9k, we stopped out overnight. This move was a payback of sorts for what happened to bears. Bears pressed shorts below 8700 only to see Bitcoin (BTC) rip up and stop them out.

The second major theme is that high-quality altcoins are doing quite. Cosmos (ATOM) and ZRX are two that have exceeded our expectations. Both of these themes were in line with the idea that Bitcoin (BTC) was going to have a hard time getting through significant resistance at 9500.

Now we believe there will be a new stage for Bitcoin (BTC). BTC has gone through what we call a "coiling phase." The recent whipsaw price action is like winding up a spring in physics. The tighter you wind the spring, the more force that is let loose when the spring is released. Said plainly, the recent exuberant range trade is likely a set up for a much bigger move.

Bottom Line: Bitcoin (BTC) has to stay above 8500. That is the location of the 50-day moving average. If that level holds, chances increase that Bitcoin (BTC) follows alts and goes up to 10k. If Bitcoin (BTC) continues to fall, the fall could be dramatic. The target could be 6k. Reason: We remember the severity of the 2018 drop. In the end, we believe the move could be up, but we are keeping an open mind to all scenarios.