Bitcoin smashed through $12,000 last week with no trouble or hesitation at all, and is currently sat at the lower end of the $13,000 region.
But, as we said last week, in order to move forwards, we are going to need to see a bit of a pullback.
If this current move into the $13,000 territory is to remain successful, then Bitcoin is going to need to pull back to the $12,500 level.
As we’ve seen time, time and time again on this epic bull run, a pullback is vital in order to be able to push forwards.
If Bitcoin’s latest bull run and moon shot is to continue, we’re going to have to see Bitcoin pull back ever so slightly.
The deepest we want to see is $12,500, any more than that and Bitcoin’s next break into $13,000 could be a long way off.
There is a pattern of higher highs going on, and if that resistance line holds in place, we’re only going to see the tops increase over the next few months.
Bitcoin has hit this top and fallen down twice in the past 7 days, and the next top looks to be around $13,220.
If this resistance hits, we’re going to see the pullback happen. But don’t get us wrong, this is a good thing for Bitcoin.
As long as Bitcoin remains above $12,500, then the move to new higher highs is still on the cards and so too is a very prosperous new year with Bitcoin touching $19,000.
A Good Time to Sell?
If you’re going to try and trade this pullback, then you’re going to need to be quick on the trigger or set up orders in the book.
There is only a $700 gap between the current price and the support level of $12,500, meaning only a small price change can take you from top to bottom in seconds.
If you are going to play it, then we suggest you sell inside the $13,000 level, so right now, and then place buy orders at $12,600 to be on the safe side.
This will allow you to take a nice bit of profit from your current trade and get back in at a lower price to make profits all over again when it rebounds.
There is a slight chance that if the $12,500 doesn’t hold, then we could sink even further, and you need to prepare for this to happen.
Once FOMO kicks in and newbie traders panic sell, it can turn a gentle pullback into a bloodbath.
In the unlikely event that this does happen, we recommend you set your stop losses around $12,200 just to be safe.
That might seem a little low, but as we’ve seen a few times in the past, the pullback can be an over exaggerated by newbie sellers.
If the newbies do cause a bloodbath, more experienced traders will swoop in to buy up that cheap BTC, meaning that it should bounce just before $12,200.
It’s going to be a tough play, if you opt to play it. But for us, we’re going to sit this pullback out and hodl on!