Bitcoin Establishes Significant Uptrend

Bitcoin has established a significant uptrend in recent trading sessions and made a clear break above the $10,000 level once again. Perhaps what is most striking about these emerging trends is the fact that they follow a period of sideways trading that marked a critical period of indecision in the cryptocurrency markets. Prior speculation amongst a growing majority of cryptocurrency analysts almost seemed to be saying that the next crypto market trend direction would likely be lower. However, in the chart below, it’s relatively clear at this stage that these bearish projections have not turned out to be accurate in any way, shape, or form.  

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The key break in this recent move higher occurred on January 6th, as BTC/USD crossed above prior resistance levels at $7,650 (pictured below). After this initial break became apparent, crypto markets experienced a retest of the same level four days later. This gives us a better sense of validity for the $7,650 level and potentially open up a new buy zone on any dips going forward. At the moment, the longer-term resistance is becoming visible just south of the $12,000 mark, so this gives us a healthy margin for continued gains as long as support at $7,650 remains valid.

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Now that the dominantly bullish move has been clarified, it’s also important for traders to start building protection against a possible reversal. This essentially means scaling stop losses rather than holding onto static price zones over the next few weeks. In reality, the recent move higher has been quite substantial and this increases the chances for a bearish reversal if we start to see rising profit-taking amongst crypto traders. At the moment, the market’s current volume levels do not seem to be suggesting this as a realistic possibility and this is largely why I expect the current move to continue.

As an alternative measure, I always like to make sure projections are likely to be accurate across the entire cryptocurrency space and compare trend differences in opposing crypto coins:

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Litecoin is currently showing some interesting new price breaks when we are comparing trend differences visible in the LTC/BTC crypto pair. Interestingly, the January 20th break above prior resistance levels has opened the door for further gains. Litecoin may now have the upper edge in what is clearly becoming a more bullish crypto space, so traders should consider some altcoins as prices are moving higher. Litecoin is now unfolding in a flag formation, so this is a highly bullish signal for what is likely to come in the weeks ahead.