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Bitcoin Forecast: Dipping Towards Support - 4 February 2020

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Bitcoin went back and forth during the trading session on Monday, as we continue to see a lot of noise when it comes to financial markets in general. At this point, the market is likely to pull back a bit though based upon the candlestick for the trading session on Monday, and quite frankly we are a little bit overdone at this point. The $9000 level underneath will probably offer a bit of support, as it was the most recent highs, and of course the figure is also a large, round, psychologically significant level in the market anyway.

That being said, it would be surprising at all to see the market reach down towards the 50 day EMA, as it takes a bit of a breather when it comes to the grind higher. At this point though, I do believe that Bitcoin is probably going to go looking towards the $10,000 level above. That’s an area that obviously has a lot of psychological importance built in, and of course an area where we had seen a significant amount of support. Now it should offer a significant amount of resistance, as it is a phenomenon known as “market memory” that will come into play. The 50 day EMA has recently crossed the 200 day EMA, so that forms the “golden cross.” This is a longer-term technically bullish signal, but it does tend to be a bit of a laggard.

The market more than likely will show quite a bit of volatility, but I still believe that there is a buying opportunity on dips. However overall, if the market reaches towards the $10,000 level, at that point I think it will be very difficult to break out. If it does, then Bitcoin would more than likely take off for a much bigger move. The $10,000 level will be crucial, and at this point the easiest trade is to try to buy it on a dip, that way you have enough real estate to make profits before you even get to the $10,000 level. However, if the market breaks down below the $8200 level, then it would kill the uptrend. Right now, I do not anticipate that, but I think a bit of a pullback is probably the healthiest thing that buyers will look towards, as it would give the markets the ability to build up enough momentum to make that charge towards the $10,000 level.

Bitcoin

Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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