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Bitcoin (BTC) Is Ready To Take Off Again

Bitcoin (BTC) is trading sideways as it eyes a break past $8,300. Sooner or later we are likely to see the price break the resistance at $8,283 to rally higher. In technical analysis, the more a level is tested, the higher the odds that it will eventually be broken. We have seen for the past few days that the price keeps on testing this level. The recent consolidation in BTC/USD has now become part of a bull flag that might soon see the price break past a key resistance to rally towards the 200 EMA on the 4H time frame which would be a very bullish development. After that, we could see it surge towards the 38.2% and subsequently the 61.8% fib retracement levels.

The 1H chart for ETH/USD shows the price trading within a large ascending triangle which will soon be broken either to the upside or to the downside. Considering that ascending triangles have a history of being broken to the upside, there is a high probability that we might see something similar this time in the case of Ethereum (ETH). This would be a very bullish development for Ethereum (ETH) as well as other altcoins and it would also be in sync with developments in EUR/USD and the S&P (500). Looking at the 4H chart for EUR/USD, we can see that it is now close to the beginning of its next move to the upside. It has yet to test the 61.8% fib retracement level and I expect that to happen in the near future.

Near term outlook of the S&P 500 (SPX) has changed as well and as we can see it closed in the green yesterday. Now, we have seen a bullish crossover on the Stochastic RSI which signals further upside in the stock market. These developments in the stock and forex markets point to further bullishness in the cryptocurrency market. The daily chart for Ethereum dominance (ETH.D) shows that dominance has plunged below the 50 day EMA but I think this could be very misleading. We have seen such false signals in the past which is why we need to be patient and not rush to catch tops or bottoms. We have already seen big moves in altcoins like Cosmos (ATOM) and ChainLink (LINK). Small cap coins are better positioned to rally a lot higher near term even while Bitcoin (BTC) trades sideways. However, we needn’t lose sight of the big picture and we need to be very cautious entering any bullish trades at this point. 

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