It’s been a while since I wrote about but given the recent record highs, it’s time for an update.
Back in October, :
As I’ve been telling my premium subscribers this fall, $10k has been the key level for this cryptocurrency. I’m not a big fan of virtual currencies by any stretch of the imagination, but as long as this holds above $10k, it is doing everything it needs to do to earn our respect. It took a few months, but it finally delivered on that promise, surging nearly 30% in a month, most of that happening over the last few days. Not bad.
I followed that up with:
There is nothing wrong with riding this latest wave higher but be sensible and follow this rally with a trailing stop. Remember, we don’t make money until we take profits in our best trades.
And you know what? Everything I said back then is just as applicable today as it was back then.
September’s bounce off of $10k support started this run, but breaking $13k and holding those gains was the first real sign this move was different from all the other fizzles. Exceeding $14k confirmed this was the real deal and this move wasn’t going to stop until it challenged the record highs. Something we finally did this week.
While all of this is obvious in hindsight, it wasn’t such an easy call to make at the time. But just like how we needed to give Bitcoin the benefit of the doubt above $10k, now that we are challenging the old highs, we smart money are betting on a continuation.
While this thing might roll over at some point, this is not that point. Obviously, we can consolidate for weeks or months near the old highs, but these huge rebounds almost never touch the old high and then simply give up. Even if the bubble eventually bursts, we are going to smash through the old highs before that happens. Maybe the top is $25k or maybe it is $30k. Either way, this latest buying frenzy is far from over.
That said, we could easily dip back to $15k on our way up to $30k and we need to ready for that. Rather than sit through a 25% pullback, it makes sense to lock-in some profits and wait to buy the next breakout above $20k. Sitting through a pullback is a lot easier when we have a pile of profits in our pocket and are riding the storm out with a smaller position. It is easy enough to buy back in when this finally breaks out, whether that is next week, next month, or next year. And if we are really good, we buy the pullback and make even more money.
But no matter what happens over the next few weeks (up, down, or sideways), this thing will go a lot higher before this rally is finished. Be ready for that $20k breakout.