BTC/USD
The bitcoin market rallied slightly during the trading session on Wednesday, gaining a little over 1%. However, the market is reaching towards the $3500 level, an area that of course could cause a bit of resistance. One of the main reasons I believe that bitcoin rallied a bit during the day was that the US dollar fell so hard. However, I see the 20 day EMA above offering resistance that is drifting lower, and of course the $3500 level should cause a bit of overhead resistance as well. Beyond that, we have the downtrend line that is still very much intact and the 50 day EMA. As I have been saying before, there are plenty of technical reasons for the market to struggle, and at this point I think that rallies still are to be squashed.
After the bounce from the lows, I think it suggests that we are going to continue to reach towards that low again, as the market does tend to retest these areas. It is just above the psychologically and structurally important $3000 level as well, so I think it’s only a matter time before we need to go back there. Overall, I think that the market will continue to fade rallies as bitcoin has not caught on, and quite frankly had gotten so over bought that we needed this massive washout. That being said, I think we have further to go to the downside and I do think that eventually we will break the $3000 handle. Once we do, we probably go down to the $2500 level, possibly even the $2000 level. At this point, I have no interest in buying this market until we break above the $4000 handle, something that doesn’t look very likely to happen anytime soon.
