Over the past month, we have made a living using both horizontal support and resistance levels in conjunction with angle-based work from the Fibonacci and Gann style. The combination of this work has been very powerful, and we believe it will continue to remain so.
As December nears its end, it seems remarkable to note that this month’s candlestick may just be a small doji. Despite all the 5 percent plus daily moves, the month of December (so far) represents nothing more than a huge stalemate between bulls and bears.
Even though the monthly candlestick is relatively small, the implications of that candle are quite big. The stalemate occurred right on top of a big Gann line. If Bitcoin (BTC) can achieve a daily close above $4,020, a move could unfold to the next Gann line at $5,250 (Figure 1).
Looking at a Bitcoin (BTC) daily chart, Fibonacci circle analysis showed the Crypto.IQ trading department’s support zone acted as a floor underneath price. The level of support was near $3,500. The next upside target from the Fib circle chart is near $5,000 (Figure 2).
So, that’s two charts with two different time frames and styles of analysis that both point to Bitcoin (BTC) at $5,000.
There is yet another chart that points to Bitcoin (BTC) at much higher levels. There has been a very subtle breakout on the three-day chart of total crypto market cap (Source: Coinsignal.trade). This chart caught our eye when total market cap bottomed right where it did in September of 2017 (Figure 3).
Looking at Fibonacci speed lines on this chart, we see that recent moves in crypto have created a breakout and successful retest. The Crypto.IQ trading desk refers to this simply as “resistance flipping to support.” It is a bullish development for the crypto space as a whole.
If total market cap moves to its next resistance above, that could mean total market cap could move from $135 billion to $257 billion. Said differently, total market cap could double. Going by this chart, it is reasonable to infer that Bitcoin (BTC) could double along with market cap.
Bottom Line: There have been a lot of analysts who have been mocked for having targets above $10,000 for the end of 2018. They may have been off by a month or two. A move in Bitcoin (BTC) to $5,000 feels imminent and $9,000 plus is achievable early next year. You may have to treat pauses in the rally as if they were dips to get exposure. The Cyrpto.IQ trading room is creating the tactics for this new style of rally. Join me there.