The Bitcoin markets rallied significantly during the trading session on Wednesday to break above the $50,000 level. We did give back some of the gains at the very highest, but it certainly looks as if the market is going to continue to go higher, perhaps reaching towards the $58,000 level. At that point, one would have to think that we will eventually go looking towards the $60,000 above.
On the other hand, if we were to turn around and break down below the bottom of the candlestick from the Wednesday session, we could go down towards the $45,000 level again, an area where we have seen support a couple of times. Even if we do break down below there, the market is likely to go looking towards the $40,000 level, which was a major breakout point previously. The 50-day EMA is also in that same general vicinity, so it does make sense that we would see support there as well.
Bitcoin continues to see institutional inflow, and that is one thing that a lot of traders are banking on. The market continues to see buyers on dips regardless, so I have no interest in trying to go short of this market. In fact, I think the market is in good shape, as long as we can stay above $40,000, maybe even closer to the $30,000 level. It is obvious that we are seeing money flow into Bitcoin as concerns about inflation grow, but we are seeing Bitcoin gain significantly against other currencies, not just the US dollar. This suggests that traders around the world are expecting to see a lot of inflation in multiple parts of the world, so obviously assets that get people away from fiat currency will continue to get a bit of a boost. In that sense, Bitcoin behaves very much like any commodity, meaning that it is a way to buy a “thing” that allows people to preserve wealth, if not outpace inflation like Bitcoin does. I do believe that we are going to go looking towards the $60,000 level over the next several weeks, so it seems like a scenario that you are either long of the market or waiting for some type of buying opportunity.
