Was it a flash in the pan, or the start of a roaring bull trend?

Friday’s green candle was impressive in both size and volumes, with BTC soaring $350 – 10% – in a matter of hours. Crypto Twitter was quick to claim the bottom was in and the new uptrend had started. While that’s possible – this is bitcoin, after all – we’re going to advise caution for now. Here’s why.

The rally faltered right where you’d expect it to end. The daily candle closed below the 50 MA, and even the wick upwards didn’t come close to the top of the triangle BTC is currently painting. The top also coincided with the 50% fib, measured from the December low ($3,122, Stamp) to its subsequent high ($4,237).

In short, resistance came into play exactly where it should, and BTC is still following the pattern of lower highs. We have not broken out of that pattern, and until we do, we have to remain bearish. As things stand, price is tracking just below the 50-day MA, and trending downwards. It does look somewhat like a (bullish) pennant is forming on the 4h, but we’re just not buying it yet – it’s too unclear for now and downward momentum/volume may be picking up.

We currently expect a return to BTC’s former levels of $3,450, and potentially below. Whatever happens in the medium-term – and under these conditions it’s not impossible that BTC would take another leg higher – we still think that 200-week MA will come under fire again.

Infrastructure, infrastructure, infrastructure

For all that we don’t like the current chart setup, we love what’s going on in the background. Infrastructure is being built, meaning that when the market does finally bottom, bitcoin is going to be in a strong position to move higher, hard. In that respect the current circumstances feel a lot like late 2014 – but with way better tech. We have a functional and growing Lightning Network; big news recently from Abra wallet, which integrates crypto with mainstream financial assets; Binance enabling crypto purchases via credit card; and, of course, those big institutional platforms like Bakkt and Fidelity, the delays notwithstanding.

We’ll get there. Not today, not tomorrow, but soon. And for the rest of your life.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

Join us on

Telegram: https://t.me/crypto_inferno

Twitter: https://twitter.com/CryptoInferno_

Facebook: https://www.facebook.com/CryptoInferno/

Steemit: https://steemit.com/@crypto.inferno