Bitcoin initially fell during the trading session on Monday, but remains very stubborn around the $30,000 level as we have reached towards $35,000. Because of this, it looks as if the market is trying to find a bit of support and perhaps turn things around. As long as we stay above the $30,000 level, then there is still hope for a turnaround and a rally in the Bitcoin market. For what it is worth, it should be noted that the Bitcoin futures markets are heavily shorted right now, and when things get so out of whack, that typically means that you are getting closer to the end of a particular move.
While I would not suggest that you should jump in and simply get aggressive to the upside, the last couple of days have been a relatively strong sign. You should also keep in mind that the candlestick for Monday is also very supportive, as it is somewhat like a hammer, and could show that there are plenty of buyers jumping in. As far as volume is concerned, it has been somewhat stable, so you cannot read too much into the volume analysis, but clearly the $30,000 level has been important.
If we were to break down below the $30,000 level, then it could open up a move to the $20,000 level, which is a large, round, psychologically significant figure and an area that was a previous resistance barrier, so it could cause a lot of noise. It was the high from the previous bubble, so there is a lot of memory there as far as the market is concerned. That being said, there is also the bullish case, where we break above the $40,000 level, which could open up a move towards the $50,000 level. If that happens, I think it could send this market much higher. It is also worth noting that the 50-day EMA is approaching the $41,000 level, as it is right there at the top of this consolidation area that the market currently sits in. This is a market that I think is on the precipice of making a rather large decision, so if and when we break out of this consolidation area, then I think we can make a much more educated trade.
