Bitcoin has enjoyed a super bullish run in February owing to numerous factors that has filled the market with heavy speculation. The currency was able to break the all-time high and is now cruising over $1200 levels. As the currency is exploring untraded regions, a lot of uncertainty has clouded the market judgement over the price movements from here on. While fundamentally the market is trending and has got support levels, let’s look into how the prices would behave technically in the near future and how this market can be traded:
Having the market view:
While trading any market, it becomes essentially very important to have a view about the market trend or atleast a good understanding of it. As indicated by the graph, the Bitcoin market has been heavily trending in the bullish direction with favorable fundamentals. With the speculation surrounding the US Securities and Exchange Commission’s decision over Winklevoss ETF, the market has seen a short bullish outburst. The trend lines show that the market has been bullish in a channel indicating low volatility and manifestation of good volumes in the market anticipating a heavy move.
Marking the right indicators:
After ascertaining the channel in which Bitcoin is confined to, it is quintessential to know the strength of the support level that is supporting the move. The base of the move would be the support level generally, but what would be really fruitful to find is the strength of this support level. For the current trending Bitcoin market, the move originated from $750 level after the drastic drop in prices due to Chinese interference. The price levels are 61% retracement levels of Fibonacci retracement level for the upward move from $560. Hence the move is backed by good support due to Fibonacci retracement levels and hence has a strong support.
Possible entry positions and positions to avoid:
Under the extremely bullish conditions, possible market entry points include the lower support line of the trend channel or the middle Bollinger band. If for some fundamental reason, the market comes all the way down to lower Bollinger band, with the Bollinger bands being steady, then taking a position at this point will turn out to be profitable. Under such extremely bullish conditions, it is wise not to take a short position expecting long term benefits. Short term short positions can be taken to scalp rewards from the market owing to the volatility but not with a long term bearish view.
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