by Jamie Holmes
Another psychological level is in the sights of bitcoin bulls, after a break of the $1,000 handle back in March 2017; this time it’s $10,000. Just a couple of days after Vegeta memes populated the crypto Twittersphere in celebration of the cryptocurrency’s rise above $9,000, the price of bitcoin moves its focus to another significant milestone.
The substantial rise in the price has come with many explanations; increasing interest from investors and the role of Bitcoin’s ‘perfect’ monetary policy are highlighted by Mike Novogratz, who recently predicted that bitcoin could reach $40,000 by the end of 2018.
Moreover, Novogratz said at Consensus: Invest on November 28 that cryptocurrency may be the ‘biggest bubble of our lifetimes.’ Even though litecoin has also hit new highs on November 28, the billionaire remarked, “Not everything can win, now it feels like it can because so much money is pouring in. Litecoin doesn’t add enough new stuff to replace bitcoin. It won’t survive as decentralized way to store wealth.”
Others point to market manipulation, with Bitfinex’ed revealing that new tethers are issued based on crypto being converted to tether, not USD deposits. The Bitfinex critic claims that bitcoin’s price rise in being orchestrated with a fresh supply of minted tethers, which are used to buy bitcoin and push the market higher.
While the price of bitcoin on many exchanges remains below $10,000, the three-month forward rate for bitcoin on the OKCoin exchange has already surpassed the psychological level. Also, the price on the BItfinex exchange reached a fresh high at $9999.00, and with the rumors about Spoofy and the Bitfinex-Tether theory from Bitfinex’ed many are wondering whether the price action is some sort of prank after peaking at just one dollar below $10,000. The milestone being missed narrowly has, naturally, already been turned into a humorous meme.
Is Bitfinex/Spoofy/Tether trolling Bitcoiners?; peak at $9999
OKCoin Three-month forward BTC-USD; already above $10,000
On the Bitstamp exchange, BTC-USD has yet to come as close to the $10,000 handle. The weekly chart below shows that an important resistance lies at $10,076.44. After rising for three consecutive weeks, sellers may start to gain the upper hand as the market approaches the Fibonacci extension level. Support is provided at $6926.54. The conversion line (blue) suggests short-term equilibrium around $7052.98 and will also provide support going forward.
On the other hand, the market could just effortlessly break through this resistance, in which case, we look for a move to the next Fibonacci extension level at $13,226.34.
The daily chart below also shows some possible resistances (and supports). The first extension level is at $10,084.53 while support is found at the recent high at $8354.46. If BTC-USD struggles to stay above $10,084.53, then we might see a pullback toward the 100 percent Fibonacci level at $8354.46. On the other hand, a break through $10,084.53 should see the market tend toward the second extension level which lies at $12,883.99.
The upward move in the price of bitcoin is supported by the Awesome Oscillator, as the oscillator is making higher highs following the price action.
The 4-hour price action, shown below, indicates the market will trend between $9721.70 and $10,453.10. A further resistance lies at $11,636.60. Looking at the Ichimoku indicator, we see that the conversion line (blue) is starting to trend higher again, suggesting the market will head toward the extension level at $10,453.10, since the previous all-time high, $9721.70, has been broken during November 28’s price action.
The conversion line should provide support going forward and serves as an entry point into long positions. For the current 4-hour trading session, the conversion line stands at $9713.00. A 4-hour close below the conversion line will point to a larger correction, with the base line (red) providing support at $9041.39. The Awesome Oscillator on the 4-hour timeframe has flattened out, suggesting bulls are weakening and the emergence of red bars will foretell of a reversal.
In summary, a break of the critical resistances around $10,070-$10,080 will lead to an intensification of the bullish momentum, with the bitcoin price likely to pierce deeper into five figures, with no significant sell zones until $11,636.60 and $12,883.99. But breaking the $10,000 psychological resistance may be a difficult challenge requiring several attempts, with plenty of room to the downside (key supports at $9721.70, $9713.00 and $8354.46.)