It really has been all doom and gloom of recent times and it appears that perhaps it’s Bitcoin and the cryptocurrencies that will be getting the Santa rally this year.

BTC was up 10% on the session and the recent volatility contraction surely helped lead to big move.

I’ve been calling for a test of the $3,000 levels, but the fact that we couldn’t flush through that level was a sign that the sellers have dried up for now.

Bitcoin Technicals

As it stands, resistance at $3,500 is my focus now as we really need to see how price will respond.

If we can hold above there is a chance of another leg higher. If we fail and can’t hold it then it looks like we might see another retest of the lows.

We’ve seen this type of price action recently around the $4,000 level when a quick bounce got met with more selling.

For the time being, BTC is still a ‘fade the rip’ type of play and I would be waiting for it to hold a big level, before changing my bias.