Bitcoin is regaining ground faster than expected, but is the worst over? On their daily broadcast, Ran and Sheldon reviewed the most powerful indicator that has flashed a signal on how to play the crypto markets right now.
Sheldon believes Bitcoin should go to $55,000 first, rather than $45,000, because it would suggest the rising trend line from the bottom in July has been broken, which will not look good if the trend line is retested as resistance.
He used the Terra Luna chart as an analogy, preserving the momentum needed and bouncing off the trend line before another step up.
Despite the pullback, Sheldon remains bullish on Bitcoin, claiming that there is no volume confirmation despite traders’ reactions every time the trend line is retested.
When and if the trend line is broken, or when Bitcoin bounces off the trend line as support in a pattern similar to how it has been moving on the trend line, volume will begin to flow into the market.
According to Sheldon, a Bitcoin bounce is required at the trend line support, which is supported by indicators. Bitcoin dominance has reached a significant resistance level; as the market rises, dominance falls, and altcoins rise. When the market falls, however, dominance rises, making Bitcoin a superior investment because it is less volatile.
If Bitcoin collapses, altcoins will be destroyed, so Sheldon advises diversifying profits from altcoins into huge market cap coins like Ethereum and Bitcoin.
According to Ran, Bitcoin’s movement is following the blueprint laid out by Plan B, the architect of the stock-to-flow model, on June 20th.
Ran agrees with Plan B’s prediction that Bitcoin will go sideways in September, because Bitcoin has a history of pulling back and going sideways between August and September before skyrocketing towards the end of the year.
According to Ran, the market has a significant warning flag advising traders to be cautious and get out of deceptive cryptocurrencies before they crash. He also advises waiting till the market is on discount before purchasing.
Sheldon agrees, stating that whenever Bitcoin tests the trend line support, the market is on sale, but it is only prudent to buy when there is a bounce and confirmation to the upside.
This episode premiered on August 25, 2021.