Chartwork in Bitcoin (BTC) would suggest a bottom is in. There are several factors highlighted by our Crypto.IQ trading desk that suggest dips should be bought. In fact, it may be true that crypto traders should actually be cheering for negative news from the Fed decision. That could provide a dip and a buying opportunity.
Looking at the intraday chart of Bitcoin (BTC), resistance at $3,626 is now support. We would not be surprised if Bitcoin (BTC) does NOT go back down there. If Bitcoin (BTC) keeps going, $4,158 could be the next short-term target followed by $4,579 (Figure 1).
Longer term work in Bitcoin (BTC) continues to suggest a bottom is in. The Elliott wave count on a weekly chart shows an ABC correction may have ended. This could give way to a new, much bigger uptrend (Figure 2).
The Crypto IQ trading team has pointed out that the three-day Bitcoin (BTC) chart has the first bullish RSI divergence in the history of Bitcoin (BTC). RSI divergence means prices made new lows, but the momentum indicator (RSI) made a lower high and is turning higher. This type of set-up can lead to really sharp rallies where dips are limited (Figure 3).
Gann work that is not chart-based suggests today’s print on Bitfinex of $3,920 could be an ignition point for more upside headed into the Dec. 22 full moon and winter solstice.
Bottom Line: People who were going to sell Bitcoin (BTC) for tax loss purposes or sell for hedge fund redemptions have likely already done so. Longer term, Bitcoin holders should be actively buying. If Bitcoin goes down, adding to positions seems to make sense. Shorter term, players may need to start thinking about two things: 1) You may have to buy strength and 2) Any sharp dip off negative Fed news or SEC statements about XRP is a chance to get in. While the Twitterverse may be engaging in bullish hyperbole, there are 10 million Coinbase account holders who can jump into this momentum trade. If you don’t know where and when you should buy, join me in the Crypto.IQ trading community. That is the source of some of the key charts used in this report.