The market is vibrant as investors expect BTC to recover and spur surges above $8,500. But before then, we need clear breakouts above $7,000 and $7,200 as buyers cement their intentions.

No doubt, the digital asset is fairly new but promising. We can see how it has steadily metamorphosized into this multi-billion dollars in 10 short years and according to Gabor Gurbacs, the Director of Digital Asset Strategy at VanEck, there is massive potential for digital assets to increase their market valuation above the $3 trillion mark in the next two decades.

But that depends on how regulators interpret the much-anticipated Bitcoin ETF proposal now that they did reject nine different Bitcoin ETF proposals but re-opened them earlier last month for review and comment.  This cautious approach was expected because the US SEC is known for their hard stance and as they prioritize investor protection, they should also factor is the widespread demand for this new asset class.

After all, with the entry of traditional players as Fidelity Investment better custodial solutions would be accessible to institutions and firms. Meanwhile, high volume investments from Yale and similar institutions would steady prices riding volatility and increasing depth of liquidity.

The reasoning for this is simple. With Bitcoin ETF, the SEC would better regulate the industry stamping out illegalities as wash trading and other forms of manipulation allowing institutional monies to flow into these ETPs which are directly under their oversight. Besides, there will be market-wide compliance as product providers seek to mesh with already compliant traditional markets.

For 11 months now, Bitcoin has failed to register noteworthy gains. In fact, what we have in the weekly chart are signs of horizontal consolidation as BTC/USD oscillate above $6,000, an important support line, inside a $200 trade range.

With last week’s close above the main resistance trend line, bulls didn’t confirm week ending Nov 4 bullish pin bar but still, we expect prices to edge higher and perhaps print above $7,200 ushering in the first wave of bulls driving prices towards $8,500.

That will be positive complementing gains of the week ending Oct 21 ensuring there is market boosting trend resumption within a bullish break out pattern at the final section of the wedge.  On the flip side, breakouts below $6,000 could trigger sellers aiming at $4,500 and later $3,000.

Two things are clear in the daily chart. First, BTC/USD is bearish. Secondly, the price is trending inside a bear break out pattern and following rejection of higher highs on Nov 8, it seems like bears did confirm the second phase—the trend resumption—of a classic breakout pattern.

Now, since BTC/USD is down 75 percent from 2017 highs, patience is key and we shall recommend shorts once there is clear declines below $6,300 or November lows with first targets at $6,000 and stops at around $6,500.

However, should prices find support and instead recover, then ideally traders should enter buys if and only if there is a breakout trade above $6,800.

All Charts Courtesy of Trading View

Disclaimer: Views and opinions expressed are those of the author and aren’t an investment advice.

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