- Bitcoin surged past $45,000 on the charts
- Dan the Chart Man is advocating for strategic buying during tight-range breakouts
For the first time since mid-January, Bitcoin (BTC) has finally breached the $45,000-mark, trading at $46,209 at press time. This resurgence has sparked optimism among investors. In fact, some traders have even set their sights on a potential push towards $50,000.
Is Bitcoin bullish?
During a recent livestream, Dan McDermitt, Founder and CEO of The Chart Guys, discussed the implications of this rally alongside Scott Melker. He shared an optimistic outlook for bullish investors in the market. McDermitt drew attention to the fact that the prices were moving sideways on the daily chart for approximately two weeks.
This period of stability, described as the tightest range observed in months, pointed to an imminent breakout. The trader remarked,
“We know a break of this range is coming, whether it’s bull or bear, and volume and volatility are going to accompany that.”
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 during these moments remains critical. He commented,
“If I’m going to be buying a bull break, it’s got to be a really tight range-breaking bull just exactly like this.”
He further elaborated that the recent price action has led to a retracement to the “golden pocket,” a level that significantly increases the likelihood of sustaining the rally.
Even if Bitcoin fails to surpass recent highs immediately, McDermitt claimed that the market will likely seek a new weekly higher low compared to the recent low at $38,500. This will provide a “nice cushion” for bullish investors.
Where is the BTC market heading?
The ongoing question for investors, according to McDermitt, is whether the market will continue to see greater bull volume or if it will consolidate through February. According to him, the next week to week and a half would be crucial for determining the likelihood of each scenario.
The Chart Guy emphasized the importance of the 12-day exponential moving average (EMA) as a key market indicator. For him, as long as the bulls keep holding this level every time it’s tested, the market is stable.
McDermitt also recognized the significance of monitoring trading volume for assessing market probabilities. Further attention was also drawn to market volume trends, particularly in the context of Coinbase and recent exchange-traded fund (ETF) activities. While the volume has recently increased, it has generally been on a downward trend over the past few weeks.