Looking at charts of Bitcoin (BTC) futures from the CME and the S&P 500 (SPY), we see some very distinct inflection points.
On the continuous front month Bitcoin (BTC) futures chart, there is a big Fib speed resistance line and a horizontal resistance point at $5,509 (Figure 1). We expect Bitcoin (BTC) to attack this level soon.
What happens at this level may determine the next big move in Bitcoin (BTC).
If Bitcoin (BTC) futures can move through $5509, it could imply that demand for Bitcoin (BTC) from investors and speculators is more powerful than constant short selling from miners. Conversely, if Bitcoin (BTC) futures fail at this level, spot Bitcoin (BTC) may fall back to support at $4,880 or $4,500.
One other chart to watch is S&P (SPY). SPY seems lofty, but is holding support above a gap from back in October of last year (Figure 2).
In our view, if stocks can hold together, it could be constructive for all speculative assets including Bitcoin (BTC). If SPY suddenly drops, it could trigger a deeper correction in Bitcoin (BTC).
Bottom Line: For Bitcoin (BTC) to move to the next Gann target near $6,200 (not shown), Bitcoin has to prove it can advance past points where miners are shorting Bitcoin (BTC) futures. Bitcoin (BTC) also needs to prove that it can hold if stocks become volatile.
We believe Bitcoin (BTC) can overcome these obstacles sooner rather than later.
The Crypto.IQ Trading Desk is a powerful resource for us when looking at the impact of Bitcoin (BTC) futures and determining strategies that work.
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