All things equal, I want the one that shook out the weak hands…before it left the station. I want the one that bears had a clean chance to bury…but couldn’t. I want the one that just trapped the shorts…then squeezed higher. So, let’s talk about Bitcoin, observes Steve Strazza, chief market strategist at AllStarCharts.
Bull hooks. Bear traps. Scoop ‘n scores. Shakeouts. These are all powerful patterns, and are all similar because they are centered on the same thing…failed moves.
This is when price violates a key level and quickly reverses in the opposite direction. “From failed moves come fast moves” is how I learned it. And that’s exactly what is happening with Bitcoin right now. Here’s a look:
BTC ramped from about $75k to north of $110k in a matter of five weeks off the April lows. The rally culminated in new all-time highs in late May…but within days, it failed back into the old range. The question, then, becomes whether or not this was a failed breakout or a false start.
BTC was simply coiling in a bull flag around the upper bounds of its range, so we were leaning in the direction of the underlying trend and thinking false start. Then on Thursday, it shook to its lowest level in about a month, before hooking higher. It’s been green on the screen since.
So as far as I’m concerned, we have our answer. This breakout is on. And think of the implications. A breakout in Bitcoin is likely to be accompanied by a new leg up for the entire crypto space.
