- The BTC/USD currency pair did very little Tuesday as we continue to dawdle around the $24,000 level.
- The $24,000 level has been resistance a couple of times recently, and it’s likely that we will continue to see a lot of lackluster performance.
- There is quite a bit of angst out there when it comes to risk appetite, and Bitcoin is pretty far out on the spectrum. In other words, traders need to feel comfortable to put money toward Bitcoin.
Looking at this chart, the 50-day EMA sits just below, offering a potential support level. If we were to break down below the 50 Day EMA, then the market will probably start to sell off quite significantly. If that were to happen, then I anticipate that the $20,000 level would be tested. Any break below there could open up a fresh wave of selling, perhaps down to the $12,000 level before it is all said and done. After all, the market is extraordinarily sensitive to risk appetite, but it seems like a lot of traders are banking on the Federal Reserve pivoting. What I mean by this is that they believe that the Federal Reserve has switched its complete attitude, meaning that it is likely to start to think about slowing down interest rate hikes.
Watch Bond Markets
That’s more likely than not a false narrative, but it is worth noting that the bond market is who actually changes monetary policy, not so much the Federal Reserve itself. With that in mind, pay close attention to the bond markets, and whether or not the yields are starting to spike again. This is because if we do get a spike in yields, that makes riskier assets a lot less attractive, as you can make a return by simply holding paper.
If we turn around and break out above the $25,000 level, it’s possible that Bitcoin could go looking to the $28,000 level, but I don’t know that it will happen any time soon. The area between $28,000 and $32,000 continues to be a major ceiling, so breaking through all of that would change the entire trend. In general, I think we will continue to see a lot of back and forth and noisy nonsense. You have plenty of time to make a decision.
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