Bitcoin markets broke well below the $60,000 level during the trading session on Monday, as $10 billion worth of crypto liquidations on Sunday in the futures markets certainly had an effect. The Bitcoin market has been in a relentless march higher, and at one point or another needed to pull back. That is the nature of the crypto market, as the pullbacks tend to be quite violent.
With the Turkish banning payment in cryptocurrency, that may have been the “excuse” that was needed for traders to start selling. At this point, there are plenty of buyers underneath, though, so it is clear that the buyers will be waiting sooner or later. It also is clear that the 50-day EMA has had an effect on the market as the Bitcoin market has broken back above the $55,000 level. At its low point, Bitcoin broke down below the $52,000 level before recovering.
The size of the candlestick is obviously rather important, as it suggests that there is possibly a little bit of continuation, but we are still very much in an uptrend. I like the idea of waiting for some type of supportive candlestick after a deeper correction, and certainly think that we will get it if we were to break down below the 50-day EMA, then the market is likely to break through the $50,000 level and attract a lot of attention. That being said, the market is still very much in an uptrend, so I do think that it is only a matter of time before buyers would come in and pick up “value” going forward. After all, we are starting to see a lot of institutional money coming into the market, so the trend should still continue to be to the upside and I have no interest in shorting. This is true even if we drop another $15,000.
That being said, if we were to break down below the $40,000 level, then it makes sense that the 200-day EMA will be closely watched for signs of a huge breakdown. After all, crypto markets do have a history of dropping quite rapidly. In the short term though, it does look like that we are going to continue to see buyers come in on these dips, so I am not overly concerned, even though I recognize that we need to see stability and perhaps even value brought into the picture.
