Bitcoin markets did very little again during the trading session on Tuesday, as we continue to dance above major support. The $6000 level is the beginning of rather massive support, so I think at this point it’s likely that we will continue to just simply bounce around in this area. This is a market that has no catalyst to go anywhere and now there is talk about the FCA in the United Kingdom banning crypto currency derivatives. While that doesn’t necessarily affect trade on the exchanges themselves, it will drive down a lot of interest by retail traders, who overwhelmingly trade the CFD markets. In general, it will drive down volumes even lower, and while we have been hearing about all of the institutional money flying into this market, it’s obvious that it hasn’t brought a lot of volume with it, which makes me a bit suspicious at this point.
That’s not to say that the market won’t eventually break to the upside, but right now we simply have no reason to think it’s going to happen. The $7500 level above is offering a bit of resistance, just as the $8250 level well. On the other end of the spectrum though, if we were to break down below the $5800 level, then I think the market could see a scenario where the market drops down to the $5000 level, and then possibly even the $4000 level. Having said that, I think we are now back to the “good old days” of cryptocurrencies when only the diehards are holding onto it. They tend to hang on and not sell, so we simply don’t break down, but then again there are enough of them out there to push this market higher. We need some type of volatility before placing any significant trades.
