BTC/USD
Bitcoin rallied slightly during the day but then pulled back to fall over. Beyond that, we turned around to form a hammer by the time we are getting close to the end of the US session. By doing so, the market looks as if it is going to end up being relatively unchanged, being down just 0.5% by the time I sat down to do this. The $6000 level underneath should be support, as we have seen it act as support more than once now. That’s a stringent level, so obviously if we break down below there it’s a very negative sign. However, the hammer tells me that we are probably ready to continue to find buyers in that area. At this point, it’s very difficult to get excited about this market, but if we were to break above the candles from the last several days, then we may go looking towards the $7000 level next.
The downtrend line continues to keep this market down as well, so even if we break higher, I think that the market will struggle to break above the $8000 level. I see resistance levels incrementally every $500, and I will play this as a market that is a “sell the rallies” situation. Ultimately, I think that the markets will continue to do that, and quite frankly there’s no reason to fight it. I know that some longer-term traders insist that $6000 is essentially the “floor” of the market, but ultimately I think that we continue to see lower highs, which tells me we will probably break down before it’s all said and done. Once we do, I’m targeting the $5000 level underneath. If we did break above the $8000 level, then the market could go to the $10,000 level next. However, something fundamentally needs to change for that to happen.
