A1 Trading Company

February 7, 2022

Bitcoin Surged- Do This Now!

Frank Cabibi

Bitcoin finally popped on consumer demand after we discussed a potential surge last week in this article. This seems like a crypto-led rally since tech stocks are not causing a spike in the market overall. COT doesn't even suggest a big money shift into the crypto industry, so this move must be a retail rally.

How To Trade The Bitcoin Surge

The problem we face as the smaller investor always comes down to FOMO or hesitation. When we see the price of an asset spike, we either come to one or two conclusions: we hop in or we stay on the side lines. Both decisions can lead to good or bad consequences, so it is never an easy choice. However, that is when the smart investor will starts evaluating the possibilities.

Bitcoin
Bitcoin broke above the $40K psych level and is not testing resistance in the $43Ks. A big bullish indicator would occur if the pair could close above the 50 DMA today. This would suggest a higher move above resistance and another test at the 200 DMA.

If you are still not holding any BTC but want to get in, then you could consider what's going on in other markets. For example, the dollar (DXY) is down today after losing just over 2% from the highs last week suggesting that the USD is hurting from inflationary pressures.

Mixed earnings is also causing some uncertainty in the equities market, and investors are unsure of where to put their money. Crypto has been in a downtrend for months that were initially sparked by regulatory concerns late last year. The crypto market tends to go in and out of these cycles making them the perfect choice for profitability one month and an account-blower the next.

Additionally, we know the momentous moves bitcoin and other altcoins can make. So, a pop like this might be an indication that this is where investors are putting their money. This means that the gains on BTC so far could be just the beginning.

Other Altcoins To Watch

Bitcoin
ETHUSD also looks promising on the 1D chart after coming above resistance and nearing the 50 DMA. It's the same idea as Bitcoin: if we can see a close above current resistance, we will likely see a move higher to the 200 DMA.
Bitcoin
ADAUSD is bouncing up over the wedge on the 1D chart and nearing the 50 DMA as well. Due to the recent crypto surge, we could see Cardano coming to the top of the wedge. The downtrend suggests that momentum probably isn't that strong to the upside, but a move higher to the top of the wedge seems likely.

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