The bitcoin market had a volatile session in a very tight range during trading on Wednesday. It’s likely that the market will continue to bounce around the current area, and unless you are looking to scalp cryptocurrencies, there probably isn’t much to do. We have no volatility, and we have recently broke through the downtrend line that had been so prominent in this market. I think at this point we are looking at a market that simply has no direction.
If we break down below the $5800 level, the market then unwinds towards the $5000 level. On the other hand, if we bounce from this area I think we could see a move towards the $7000 level, perhaps the $8250 level. I think bitcoin is a short-term scalpers type of high-frequency trading environment, and if we do have more institutional money coming into this market, I can guarantee that’s exactly what will happen. Just look at what has been done with the stock market over the last 10 years, that’s what will be coming to the crypto currency universe.
Ultimately, I think there is probably more risk to the upside than down, but I would not expect anything to happen without some type of news catalyst or something like that. Right now, the market simply has nowhere to be, and it seems like volumes are drying up. Because of this, I like the idea of taking leverage out of the equation, but I should point out that the CFD market could be in jeopardy now, at least in the United Kingdom. The Financial Conduct Authority is thinking about banning CFDs in the crypto currency market, which of course will have a massive effect on retail trade.
