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Bitcoin (BTC/USD) Resilient but Limit Upside to $9000 for Now

Recently, price action suggested Bitcoin (BTC/USD) might be heading into another low for 2018. However, we did note that "If price rebounds sharply from here $6100 and pushes above $6500, THEN we could seeing an inverted head and shoulders pattern. This is the scenario that would keep the bullish reversal outlook alive. " 

Inverted Head and Shoulders (BTC/USD 4H CHart)

  • As we can see on the 4H chart, price indeed found support around $6100 and rebounded sharply.
  • This was the inverted head and shoulders scenario we discussed.
  • We are probably therefore still in a recovery since late June. We can expect another week or two of upward pressure.
  • If price pulls back towards $6800, we should then look for support. 
  • To the upside, I think we should start anticipate resistance around $8000. 
  • If a pullback goes below $6400, I would have even stronger anticipation of a new low because that would reflect a failed price bottom, and a failed bullish reversal.
  • Until a break below $6400, I think the pressure remains upside towards $8000, maybe even $9000, where the 200-day simple moving average resides.

BTC/USD Daily Chart

Fundamental Factors?

I usually don't try to match news with price movement because there is so much noise. However, instead of a specific news, I think there is some aggregate trend that is giving BTC some resilience - the fact that Wallstreet is preparing exposure in the crypto space. Most recently, we have these 2 headlines:

BlackRock, the World’s Largest Asset Manager, is Exploring Cryptocurrencies (

Coinbase Wins Nod on Deals as It Seeks to Add Security Coins (

The fact that BlackRock shows interest and that Coinbase is looking to basically list ICOs means this space still has growth.

Price Anticipation: 

The thing is, as much growth there is ahead for the space, price action in 2017 was still a bubble that is deflating in 2018. For this reason, I am not convinced that these headlines can help BTC/USD anchor into a bullish mode yet. To me, it is still prudent to keep dry powder below $6000, although I think we should have some exposure already between $6000-$7000 in case the capitulation dip we are looking for doesn't materialize.  

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