The Bitcoin market has been all over the place during the trading session on Thursday, as we initially tried to rally and recapture the $50,000 level, but at the time of writing we had reached as low as $47,000. This is a short-term pullback, and I think it is nothing more than that. The $45,000 level underneath should continue to offer a significant amount of support based upon the recent action, and if we were to break down below there it is likely that the market could go looking towards the 50 day EMA near the $41,600 level.
When you look at the candlestick, it is rather negative, considering that we broke down below the bottom of a hammer, but I do not necessarily think that this kicks off anything major. I just think that at this point in time Bitcoin is struggling with the psychological importance of the $50,000 level, perhaps as well as the “market memory” due to the fact that it had previously been so supportive. If we do break down significantly, it is really not until we break down below the $40,000 level that I would be concerned about the overall trend.
Keep in mind that the Bitcoin market had risen quite a bit as of late, and it should be noted that several alt coins have done much better, as the price of a single Bitcoin makes it less attractive to a lot of people. Nonetheless, this is the main driver of crypto markets in general, so regardless of which you are trading, you need to pay close attention to this chart. Having said that, if we can break above the $51,000 level, then it is likely that the market could go looking towards the $60,000 level, with the $55,000 level offering a bit of a waystation on the way up to the higher levels.
As far as selling is concerned, we need to break significantly below the $40,000 level before you start to fear the downside again, but really at this point in time I think it is going to be difficult to make that happen, as we have seen such a significant move yet again. Ultimately, this is a market that will more than likely continue to offer more of a “buy on the dips” type of market than anything else.
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