If bitcoin (BTC) breaks $14,000, it is going straight to $20,000.
I hope you will allow me a little wriggle room in that but a break of $14,000 will make a fast move to about $20,000 very likely indeed.
This is the setup:
This is an explosive technical setup. BTC repriced as predicted around $11,000-$12,000 and depending on how you analyze the equilibrium it has been trading at, is making a good stab at breaking out to another big run upwards.
You might say it has happened and that the equilibrium range closed and now it is on the way up again, but that is an aggressive reading. A breakout is a 20% chance and thinking this is it, is at best 50/50, but a break above $14,000 would push it to 75% or to me optically as a dead cert. Let’s just say bitcoin above $14,000 will see me cracking open a nice Claret.
Make no mistake this is an incredible chart. The volatility is truly epic. The bigger the volatility the bigger the upside if it breaks. Volatility is energy and its scales have all moved. Of course, that can be bad news as any leveraged crypto trade will have suffered, as one of my recent articles warned. Various parties will try to stop longs out so try not to be levered up to your eyeballs or even levered at all. It would have been almost impossible to lever into this market as it has unfurled, without being spiked out. Leverage kills in even mundane markets and fast markets make it impossible often by design.
Changes in geopolitics could spoil the magic as this remains a capital preservation move by ME and APAC, read Iran, China, Hong Kong and their zones of influence. The global general public has yet to reawaken and when and if they do they will dive in head first and this will indicate the end of the run.
The parabolic price chart is so reminiscent of many boom and bubble markets that it is hard to expect anything but an oncoming vertical. Lots of economic studies say it isn’t so, but time and again it is. A parabolic move by bitcoin now is hard to guess at sensible levels and we are perhaps less than half way up a proper commodity or tech style hockey stick chart move. Rest assured this is not "normal."
However, if you chose to play the trading game you must stick to the basics and a solid rule is ‘to trade what you see’ not what you want to see or expect to see. Is it even possible to see anything else but a rocketing market?
Consequently I am left wondering about strategy above $20,000 where I am expecting the bitcoin price to come to rest in what looks to be a time not too distant.
Normally it would be a safe bet to expect BTC to pull back from approaching $14,000 but the current move is very strong. If it does pull back the tactic remains the same. No decision will be made till Bitcoin’s price breaks above or below the current equilibrium and until Bitcoin breaks above $14,000 moves should be considered noise. That’s the plan but the market is looking so strong now its easy to jump ahead and see the next move already underway and we will know very soon.
In 2018, Chambers won Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Awards.
I hope you will allow me a little wriggle room in that but a break […]