Tom Lee: Focus On Long Term Timeframes After Bitcoin Defends $11,000 Support

  • The ‘crypto winter’ is over; the long term timeframe is still positive – Tom Lee.
  • A reversal occurred on hitting lows around $11,000 giving way for a rebound.

The founder of Fundstrat Tom Lee in his comments on the $2,000 fall in Bitcoin price on Wednesday said that people need to focus on the bigger picture. With this, he meant that the acute drop has done nothing to stop the bullish trend. According to Lee, the ‘crypto winter’ is over and the long term timeframe is still positive.

Following the rejection at $13,000, Bitcoin trimmed gains only to find support at $11,000. Lee and other experts believe that the Fed’s chair comments on Facebook Libra trigged the declines. However, a correction has since occurred following the negative comments by the U.S. President Donald Trump who said:

“I am not a fan of Bitcoin and other cryptocurrencies.”

BTC/USD 4-h chart

Bitcoin Chart
Bitcoin Chart source: Tradingview 

Meanwhile, Bitcoin has recovered from the support formed at $11,000 mainly riding on the aftermath of Trump’s tweet. The upside has, however, been capped at $11,800. Before the fall Bitcoin had extended the gains above the key $13,000 hurdle following a breakout from a symmetrical triangle as discussed in the earlier price analysis.

Bitcoin formed a high at $13,211 before giving in to selling pressure triggered by the Fed’s chairman Jerome Powell comments on Facebook’s Libra digital asset. Bitcoin failed to find support at $12,000 while the 100 Simple Moving Average (SMA) did little to stop the bear pressure.

However, a reversal occurred on hitting lows around $11,000 giving way for a rebound that is still ongoing above $11,700. The Relative Strength Index (RSI) is currently moving horizontally below the average after a shallow recovery. Continued movement above the average will revive the trend towards $12,000 and beyond. The MACD in the same time frame (4-h) is still in the negative zone but has slowed down the slope to show that selling pressure is diminishing.

BTC Key Technical Levels

Key Support Areas: $11,000, $10,000 and $9,500.

Hurdles: $11,800, $12,000 and $13,000.

RSI: Horizontal movement points towards sideways trading.

MACD: Reducing divergence suggests increasing buying pressure.

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