The bitcoin market has broken down a bit during the trading session initially on Monday, slicing below the 9000 level before recovering a bit. That is a good sign, especially as we are forming a hammer sitting on top of an uptrend line. The market now looks as if it is trying to respect the ascending triangle, and of course the 50 day EMA which is sitting in the same area. With that being said, there is a significant amount of support stuck between the 50 day EMA which is colored in red, and the 200 day EMA underneath which is painted in blue. That is essentially the “floor” in the market, and I think it is only a matter of time before buyers would jump in.
Looking at this candlestick, if the market can break above the highs of the trading session on Monday, then it is a good sign that the buyers have taken over again, and we should go looking towards $9500 level initially. If we can break above there, then it is likely that the market is getting ready to go towards the $10,000 level. At this point, there is a large, round, psychologically significant figure in play, extending all the way to the $10,500 level. All things being equal, the market is highly likely to see a lot of fight in that area, perhaps causing some issues.
When you look at the potential ascending triangle, this is a typical sign of markets trying to break out. At this point, it is very likely that we will continue to see a lot of push and pull, but clearly this has been a “buying the dips” type of scenario that we have been in and I do not think that is going to change anytime soon. However, if we were to break down below the 200 day EMA that could make things a little bit tricky, and then at that point we could go much lower. At that point, one would have to think that the market is going to go down to the $7000 level, near the 50% Fibonacci retracement level. The $7000 level is an area that is going to be crucial, so a break down below there would be a complete collapse of the market, at least for the time being. If we can break out above the $10,500 level, this is a market that will take off like a rocket.