- Bitcoin soared past $45,000 on the charts
- Dan the Chart Man advocates strategic buying during tight breakouts
For the first time since mid-January, Bitcoin (BTC) has finally crossed the $45,000 mark, trading at $46,209 at the time of writing. This revival has led to optimism among investors. Some traders have even set their sights on a possible move towards $50,000.
Is Bitcoin Bullish?
During a recent live streamDan McDermitt, founder and CEO of The Chart Guys, joined Scott Melker to discuss the implications of this rally. He shared an optimistic outlook for bullish investors in the market. McDermitt drew attention to the fact that prices moved sideways on the daily chart for about two weeks.
This period of stability, described as the tightest range in months, indicated an impending outbreak. The trader noted:
“We know a break in this range is coming, bull or bear, and volume and volatility will come with it.”
It’s not too late to buy Bitcoin
McDermitt explained that while the potential for a 10% follow-through on a bull break may not be as prevalent as in the past, the strategy of investing at these times remains crucial. He noted:
“If I’m going to buy a bull crusher, it has to be a really tight bull, just like this one.”
He further explained that the recent price action has led to a return to the golden pocket, a level that significantly increases the chances of the rally continuing.
Even if Bitcoin fails to immediately surpass recent highs, McDermitt claimed the market will likely look for a new weekly higher low compared to the recent low of $38,500. This will provide a “nice cushion” for bullish investors.
Where is the BTC market headed?
The ongoing question for investors, according to McDermitt, is whether the market will continue to see increased bull volume or whether it will consolidate in February. He said the next week and a half would be crucial in determining the likelihood of each scenario.
The Chart Guy highlighted the importance of the 12-day exponential moving average (EMA) as a key market indicator. To him, the market is stable as long as the bulls continue to maintain this level every time it is tested.
McDermitt also recognized the importance of monitoring trading volume for assessing market opportunities. Further attention was also drawn to market volume trends, particularly in the context of Coinbase and recent exchange-traded fund (ETF) activity. Although volume has increased recently, it has generally been on a downward trend in recent weeks.