Bitcoin has rallied during the trading session on Thursday to reach the 200 Day EMA. Looking at this chart, it appears that the market is trying to break out for a bigger move, but there is a significant amount of resistance between the 200 Day EMA and the $45,000 level. That is an area that I think is going to continue to be difficult, but if we get a close above all of that, it is likely that the Bitcoin market will continue to go higher.
The market breaking above the $45,000 level almost certainly opens up the possibility of reaching the $50,000 level. That is an area that had been resistance a couple of times recently, as well as support in the past. Ultimately, this is an area that I think the market is trying to get to, as we continue to see upward pressure despite the fact that there has been a certain amount of risk aversion. Keep in mind that Bitcoin is further out on the risk spectrum than many other assets, so if we get some type of major “risk-off scenario”, Bitcoin will be one of the first things sold off.
Having said all of that, the market had sold off so drastically recently that we could be consolidating for recovery. After all, Bitcoin lost almost 50% of its value and therefore a lot of longer-term traders would be stepping into pick up more. That has been the pattern with Bitcoin and other crypto markets for a long time now, and therefore it is likely to try to repeat. Looking at this chart, I think the market will continue to see a lot of noisy behavior, but it certainly looks as if we are trying to break out.
If we were to break below the $40,000 level, then we could see a significant selloff, but even then I would anticipate to see quite a bit of support near the $37,500 level, as well as the $35,000 level. All of this is an area where buyers had been aggressive, and therefore it makes sense that we would see support again. If we were to break through all of that, Bitcoin more than likely would collapse for a nether massive run lower. At this point though, it certainly looks as if the buyers are starting to take control for a bigger move.
