BTC/USD
Bitcoin markets drifted lower during the trading session on Thursday, losing 2.5% by the time I sat down at my desk. We have broken through the bottom of the hammer from the previous session, changing it into a “hanging man.” That of course is a negative sign, but quite frankly we know that there isn’t much of a surprise and that, as every high that we have tried to make has been a failure, at least since the beginning of the year. There is still a downtrend line above that plays a significant part in where the market goes, so it’s not until we break above the $8000 level that I’m comfortable buying. I think that selling rallies that show signs of exhaustion will continue to be the easiest way to play this market.
Alternately, the $6000 level underneath is massive support, but the fact that we cannot make fresh, new highs tells me that we are making a significant attempt to break down below there. If we were to do so, this market would unwind down to the $5000 level, perhaps even lower than that. Pay attention to the value of the US dollar, that is also half of the equation so of course it has an influence as well. I believe that rumors about ETF formations and whether or not they are going to be allowed and properly regulated will continue to push this market around. I find it kind of ironic, considering what bitcoin is supposed to be.
That being said, we have heard stories about how bitcoin was “gold 2.0”, “a store of value”, “a new type of money”, a way to avoid central banks, and so on. It seems to me that every time the market runs into trouble, there’s another reason to own it. I think this market will continue to struggle until we can find a true and significant reason to use the cryptocurrencies. At this point, it still looks like a solution looking for a problem to me.
