Along with that, there is a newly developed higher low formation established around the 21,8 area followed by an inside bar. While 24K is a resistance, price continues to linger in the area after presenting these bullish formations. These are signs of strength, and make for a stronger argument for the trend to continue. Higher lows often lead to higher highs.
So what can go wrong? Good thing you asked. One bearish scenario would be the failed break out or failed high formation which could develop upon a test of the low 24Ks. If this takes place, the selling pressure from all the new longs can lead to a much broader retrace that can lead to a test of the 21,200 area or even as low at 18,500. It may sound extreme, but if a larger magnitude Wave 4 develops here, Bitcoin can get stuck in a large consolidation for a couple of weeks or months.
We recently sent out a new swing trade idea in anticipation of the 24K break out. Our risk is defined by a break of 22K. If we see a clear sell signal sooner, we will also be prompted to exit and wait for a better setup.
Want to learn more about how our swing trade strategy works? We had a trade from 18,680 which was sent out on December 9th which reached our third profit target of 23,680 within a week for an average 2K profit. They all certainly do not work out this way, but when they do it is nice.
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I hope you found my analysis helpful, thank you for checking it out.