Bitcoin markets have bounced from the $30,000 level again during the day on Monday to show signs of stability again. The hammer is a good sign, and the fact that we are hanging about the 200-day EMA does suggest that perhaps we are at least trying to turn things around and go to the upside. Granted, the market had fallen rather hard, so at the very least we are reasonable to expect the idea of a bounce. That being said, Bitcoin obviously has a lot of work to do.
If we break above the top of the candlestick, then it is obvious that we are going to test the $40,000 level. Breaking above that level would be a psychologically important victory for those looking to get long, so I think at this point markets would probably then start to focus on the $45,000 level. This is a market that has seen a significant breakdown, so the question now is whether or not the market can continue to drive to the upside.
Bitcoin is in a different place than it was several years ago, though, as there is a large institutional presence in the market, so that could provide a little bit more support than we had seen a few years ago after the massive melt up. That being said, if we do break down below the $30,000 level, it is likely that we will then go looking towards the $20,000 level. I think overall, this is a market that will attract a certain amount of attention sooner or later, so I think at this point it is only a matter of time before you can start to pick up a little bit of value.
I do not know that I would jump into the market right away, but if we go sideways, that is actually a good sign, because it shows signs of further stabilization. That is exactly what we need to see in order to get long and start to break to the upside. That being said, if we were to break down below the $20,000 level, it could get rather ugly at that point. To the upside, I believe that the 50-day EMA near the $50,000 level will offer a significant resistance barrier that will be difficult to overcome.
