The bitcoin market has rallied ever so slightly during the trading session on Wednesday, as we are hanging around the $45,600 level. At this point in time, the market is likely to see a lot of choppy consolidation, and therefore I think at this point in time we are simply trying to build up enough momentum to make the next move. If we can break out to the upside, then we will likely go looking towards the $50,000 level.
Keep in mind that the $50,000 level is a large, round, psychologically significant figure, and an area that previously had been supportive, so it would make a certain amount of sense that the “market memory” could come into play. Furthermore, the consolidation area between $30,000 and $40,000 being broken out of suggests that we would go to the $50,000 level as well. The 50 day EMA is currently breaking towards the $40,000 level and aiming higher, so I think sooner or later that comes into the picture to offer a bit of support as well. Because of this, I think short-term pullbacks should continue to attract a lot of attention, therefore I would be a buyer of these dips. After all, the market has recently seen an impulsive move higher and a bullish flag breakout.
The US dollar has been strengthening, but the fact that Bitcoin has completely ignored this is a good sign as well. I think that the $50,000 level will probably cause a few headaches, but ultimately once we break above there the market goes looking towards the $55,000 level, and then possibly the $60,000 level next. At this point, the market would be at a new all-time high, and therefore it is likely that we could continue to go even further to the upside.
If we break down below the 200 day EMA at the $37,000 level, then it is possibly that we could go looking towards the $30,000 level. Breaking down below that would be a complete catastrophe for Bitcoin, as the trend will have changed quite drastically. The market continues to look bullish though, and that is how I look at it, through the prism of trying to find value along the way. We might be a bit noisy in the short term, but ultimately it looks as if we go higher over the longer term.
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