Bitcoin at $35,000, the right strategy to adopt to invest during a bull market
Julien Moretto – 6 Jan 2021
2021 begins as 2020 ended: with a powerful bull market in cryptocurrencies. Going from record to record, Bitcoin showed more than $35,000 (or €29,000) on January 6, up 26% in one week. Ethereum has also been catching up in the last few days and is now trading above $1,000, getting closer to its historical high of $1,400. Except for a few exceptions such as XRP and projects based on anonymity, the performances of altcoins are also on the agenda since a week.
This bull market context forces you to adapt as an investor. When assets are in price discovery, technical levels are less relevant. Moreover, we observe that Bitcoin does not currently offer any retracement to reposition itself for long term investment. A very favorable price action for those who bought lower, but more complicated for those looking for an entry.
The watchword will be: do not sell your bitcoins. A good attitude can be to take profits on a small part of your position (10 to 15% of the maximum position) on psychological price zones fixed in advance, such as for example $30,000 or $40,000 on Bitcoin. We will see in the detailed analysis the potential price zones to make strategic purchases or reinforcements, if the price offers a correction in the order of 20-30%. We advise to keep this strategy until further notice. To date, there are no concrete signals of a trend reversal, either technically or from a macroeconomic point of view.
We wish you all the best for this new year!
- According to CoinGecko, market capitalization sets a new record, at $950 billion compared to $650 billion before Christmas.
- The dominance of Bitcoin is 67.8%.
- The best performance of the top 50 is to be attributed to Dogecoin (DOGE) with +132% over one week.
We invite you to discover our analysis in video (in french and dated from January 5th) :
Hold / Take profits
- Bitcoin is trading around €27,700 ($34,000) on January 6, up 26% in 7 days. In price discovery, we are no longer looking to sell this asset on possible technical areas for investment purposes. Predicting the peak of this wave of increase is extremely risky. We adopt the strategy of holding, possibly with slight profit taking on symbolic price levels such as $30,000 or $40,000.
- These slight profit gains will allow for repeat purchases when a more pronounced correction occurs. The area from 19900€ to 21600€ (24500$ and 26700$), would be a good area to redo long term purchases. In case of a more pronounced correction, we will of course watch for a retest of the top zone at the end of 2017 at $20,000.
- The long-awaited bullish reaction occurred on Ethereum (ETH), up 51% in one week. Assets soar to €930 ($1150). As soon as Ethereum confirmed the bullish breakout at the €520 ($623) level, the sequence began. We also still hold Ethereum and are carefully watching the area of its previous historical high, between 1250 and 1400$. We will take partial profits if the price reaches this zone. For those who wish to buy, it’s more complicated and risky, the zone between €640 and 700 ($790 and 860) can be interesting for medium/long term redemptions.
- Polkadot (DOT) is a cryptoasset that is on the rise. It is quoted at €8 ($9.80), up 27% this week. Since last summer, the asset has been trading in a wide range between $4 and $6. The powerful rise of the last few days suggests the start of a bull market cycle. We are monitoring the Fibonacci 50 and 62% retracement zone, between $6.86 and $7.56 to position ourselves for buying and play a dynamic upward movement.
Tops & flops of the week (top 50 marketcap)
1- Dogecoin (DOGE) : +130%
2- Stellar (XLM): +84%
3- Uniswap (UNI): +67%
1- Monero (XMR) : -16,7%
2- DASH : -13,2%
3- Zcash (ZEC) : -8,8%
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