BTC/USD
Bitcoin markets fell again during the day on Friday going into the weekend, as we are touching $4200 as I record this. The market has a significant amount of psychological and perhaps structural support to be found at the $4000 level, so I would not be surprised at all to see a bit of a bounce from here. Overall though, I think that rallies still are to be sold and it’s difficult to imagine a scenario where buying can be sustained. There’s just nothing on the horizon to support this market.
If we do break below the $4000 level, it opens up the door to the $3500 level, perhaps the $3000 level next. It’s not until we break above the 50 day EMA on a daily close that I would consider buying this market, which at this point would be an almost 50% gain. In other words, I believe that the bubble continues to deflate, and we go to much lower levels.
The biggest problem with Bitcoin that I see currently is that nobody’s using it. In other words, there’s going to be no demand and it’s kind of frightening watching how many people out there believe that there is some type of conspiracy to drive the value lower so that all of the “whales” can step in and pick up coins on the cheap. That would suggest that perhaps the people who rode the market all the way up to $20,000 are somehow more intelligent than other traders would be. All one has to do is look at the chart and realize how intelligent you would have to be to ride a market down from $20,000 to $4000.
I’ve recently read several articles that suggests that even when the market was going sideways, bitcoin simply wasn’t being used as a method of payment. I believe that myth has been blown out of the water, as it’s never going to be a medium for financial transactions. Selling all rallies continues to be the way forward, at least as far as I can see.
