Beginning of the Next Bull Run…or Just a Bull Trap? 

Bitcoin retook the $20k level, and ETH climbed above $1500 for the first time in months. Is this the beginning of the next major bull market, or is this just a bull trap for now? 

First off, let’s look at BTCUSD on a weekly chart: 

For the price to be in an uptrend, we have to see a SERIES of higher lows and higher highs. So far, we’re seeing a nice rally up to an intermediate high printed in late October/early November at the $21.5k level…but not past it.  

Let’s look at ETHUSD on a weekly chart: 

ETH as well has not “punched out” above the late Oct highs of $1677 so the current rally leg is still a “lower high” on the weekly chart. 

Conclusion: Both BTCUSD and ETHUSD are showing a really nice bottom short squeeze but until we see the late October highs DECISIVELY taken out to the upside, these are nothing more than intermediate bear rally legs and our ASSUMPTION is that they would fail. That’s not what I would like to see happen, but trading is all about probabilities and possibilities, not certainties nor absolutes. 

So what would we need to see happen on the price charts to make this a higher probability of the start of something stronger? Answer: BREAKOUTS. 

This graphic probably shows what I’m looking for better than words: 

 We’ve seen a really nice move off the bottom and the positive momentum is great to see, however don’t be surprised if the momentum disappears in a flash, as that’s what Bear Markets do so very well. Look for a decisive break above the October highs which settles back to hold that October pivot. 

We’ll keep watching for those levels and will call them out for you.