Bitcoin Price Analysis November 29, 2017, Technical Analysis

Bitcoin continues to rally during the session here on Tuesday, as the Bollinger Bands are starting to show a very reliable move based upon the 20 SMA on the hourly charts. The $10,000 level above is an obvious target for most traders, and I think it’s somewhat of a foregone conclusion that the market is going to try to not only reach $10,000 but break above a given enough time. I do worry about the market once we do break above the $10,000 level, as there will more than likely be massive profit-taking by some traders out there. I believe that it will be typical of large, round, psychologically significant numbers, meaning that there will be a violent snapback, but eventually, traders will pile in once the dust settles and it seems safe to go long.

For those of you new to cryptocurrencies, don’t be alarmed if we end up losing $1000 on this pullback because quite frankly that’s only a 10% drop, which is minor in the relatively thin world of Bitcoin. The market should continue to be very noisy though, and certainly, I think that with the overall general public suddenly getting involved, we could see the next search higher. However, there’s also the argument to be made that this is the “dumb money,” as 300,000 accounts were opened just last weekend at Coinbase. I believe that Bitcoin is at a significant level, as now that the general public is starting to think about trading it, and that the $10,000 level is starting to hit the headlines and become talked about in various places, this often will become the top of a bubble. That’s not to say that we are going to break down now, quite frankly I assume we are going to go above $10,000 and the short-term, but we are certainly overbought by just about any metric you measure it.

As I look at this chart, especially in the monthly timeframe, and with the various headlines and conversations that I am hearing, it’s hard for me not to think about just a few years ago when supermodels were refusing to be paid in anything but euros, gold-dispensing ATMs were suddenly going to be a thing, and buying a house was a sure bet, as you can just refinance it because property values only go up. This isn’t to say the Bitcoin is going to evaporate, but we are beyond frothy at this point. Currently, buying on dips would be the only way I would get involved, with $9800 looking to be supportive, just as the $9600 level will be.