How the Next Pullback Occurs Will Be Key

After the FTX debacle and the resulting two-month base that the price has put in, Bitcoin has risen from about $15.5k to $24k – a 55% return in about a month! January has been good to crypto. 

This chart shows today’s BTC movement with an “expected move” plot out to late March:

So what’s next? There are a couple of data points that we can look at which will help us know if this is a “breakout” or a “fakeout.” 

FIB RETRACEMENTS – through this swing higher that started in early January, I would like to see any pullback hold above the 50% retracement which is about $20,140. 

WEEKLY HIGHER LOW –  the price has made a new weekly “higher high” above the November 2022 high which was just before the FTX bomb. It’s going to be key that any pullback on this weekly chart form a “higher low” on this weekly chart. You can see how effectively the early 2021 “higher low” was to propelling this chart much higher: 

Remember this: for a chart to go higher, it must go lower first. In this manner, it builds the sentiment negatively and creates the fuel necessary for prices to rise, which is shorts being squeezed out by buying back their positions which also adds to the demand.