In Monday’s post, we mentioned that this would be very much a “wait and see” week as we watched Bitcoin’s near-term consolidation play out.
We’re not really expecting much more than tumbleweeds and a few winners here and there while Bitcoin’s stuck below the upper-end of this range near 47,500.
But if we see a breakout above that level, we’ll be deploying some more cash into new long positions.
It looks like we could be getting a resolution this morning, with Bitcoin trading back into the 47,000’s.
For those with a shorter timeframe, the bias is higher above 47,500 toward the former crash highs of 53,000:
Otherwise, if this breakout fails to hold, expect more messy action in the coming days.
Of course, these are near-term developments. But even when we zoom out, this is still a major level of interest. When we were buying around the lows of 30,000, the next destination on our journey were those former lows that marked Bitcoin’s last defense before the crash earlier in the year.
It’s no coincidence we’ve seen some chop and churn at this level.
But the approach now is that if buyers have absorbed all this selling pressure and Bitcoin’s above 46,000, we need to be aggressively long with a target of those former first-half highs of 65,000.
From an asset allocation perspective, adding additional Bitcoin exposure relative to the Altcoins makes sense here too, with Bitcoin at a logical level to take on a leadership role in the near-term.
And note that isn’t a bearish development.
We don’t need altcoins to outperform for the asset class to make new highs.
Bitcoin’s lead crypto higher many times before (we wrote a post on this exact dilemma, which you can read here).