Direct from the desk of Dane Williams.
An argument is to be made that Bitcoin is simply trading in a range before continuing higher.
With all this talk about Bitcoin (BTC) being in a bear market, all that I can see is Bitcoin trading within a range.
Take a look at the following Bitcoin daily chart with a few horizontal lines thrown on and you should quickly be able to see what I’m talking about.
Bitcoin daily chart:
What I see is Bitcoin breaking out of its previous all time high at 20K and then printing a range.
Keep it simple, stupid.
Bitcoin support and resistance
To be fair, the range is fucking massive.
I mean the range I have drawn on that chart spans 40K.
When you consider that we’ve gone from 0 to 70K in barely a couple of years, these moves would normally be considered major trends in themselves.
But Bitcoin is not a normal asset.
Bitcoin is an extremely young, volatile asset and due to liquidity inefficiencies, we don’t see the same price action in other fully engrained, legacy asset classes like currencies or stocks.
I talk a lot about only looking to do business at levels on the chart where price is behaving efficiently.
This means only looking to trade the price action around support/resistance zones because this is where the market is most liquid.
Ultimately liquid means efficient.
Now, cast your attention back to the Bitcoin daily chart above and consider which areas on that chart are conducive to efficient price action?
Not many, right?
Just the 30K zone and just below the 70K zone.
Yep, the range.
Ultimately, Bitcoin is range-bound
I keep saying that any price action between major support/resistance zones is nothing more than noise because if there's no liquidity of course it is going to whipsaw.
With a lack of liquidity, moves are going to be exaggerated in both directions.
When you combine that with an emerging asset like Bitcoin, then this is what you get.
But perhaps what I find most exciting is the fact that Bitcoin obviously has huge underlying corporate and even government demand at the right price points.
So while I say that Bitcoin is simply range-bound, I would be much more inclined to be a buyer at the bottom of this range.
And surely I'm not the only one with this train of thought.
Final thoughts on Bitcoin price action
In conclusion, yes the Bitcoin range is massive and somewhat ridiculous.
But it’s range-bound trading nonetheless with a higher likelihood of bouncing here and creating a new all time high, than going lower.
Bring on the eventual upside breakout and inevitable march to 100K.
Best of probabilities to you.
Posted Using LeoFinance Beta
