Bitcoin markets have rallied during the trading session on Thursday as we continue to look for some type of upward momentum to take on. The market has been consolidating just above the $45,000 level, an area that of course has attracted a lot of attention. The market is forming a bit of a bullish pennant, so I think that we could continue to go much higher, especially as there seems to be a lot of concern out there when it comes to the economic situation. In fact, there may be people hiding money in Bitcoin going forward, as a lot of other assets are struggling at the moment.
When you look at the chart, you can make an argument for a move towards the $50,000 level, which is a large, round, psychologically significant figure as well as previous support. In other words, the market will have a certain amount of memory attached to that level. The pendant measures for that move, just as the previous flag did. The flag stretched from the $30,000 level underneath to the $40,000 level. In other words, it was “$10,000 tall.” Taken that measured move, that also has you looking at $50,000 going forward.
The 50 day EMA is starting to curl higher as it crosses above the $40,000 level, and therefore looking very much like it is going to offer support on pullbacks. Ultimately, this is a market that you need to be a buyer of dips, as we are very bullish over the last several weeks, and Bitcoin does tend to move quite rapidly at times. In fact, it is not until we break down below the 200 day EMA which is down at the $37,000 level that I would be concerned about the overall uptrend now. If we were to break down below there, then it is likely that we could go looking towards the $30,000 level, which breaking through that level could send the market down towards the $20,000 level rather quickly, and it would of course be an extraordinarily negative turn of events. I think at this point, the only thing you can count on is a lot of noisy trading, but I still like the idea of buying overselling as we obviously still have an upward tilt to this market. Ultimately, working into a position over time makes the most sense.
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