Bitcoin is a market that is starting to run away with the bullish momentum, but at this point it is only a matter of waiting for an opportunity to get long. I think this is a market that will continue to go higher given enough time, but we need some type of reasonable opportunity. The market had gotten ahead of itself, so it certainly makes sense that we may see the dips that so many of you will be waiting for.
The $40,000 level underneath is likely to see a significant support attempt, due to the fact that it was previous resistance. So-called “market memory” suggests that it should happen, and the fact that the 50-day EMA sits underneath and is curling higher makes sense for support as well. At that point, I would anticipate that there would be a lot of headline noise as well, and now that Bitcoin looks as if it is trying to go higher, it certainly makes sense that anybody short of this market would be willing to get out in that general vicinity as well.
If we break above the high for the trading session on Wednesday, then it is likely that we will go looking towards the $50,000 level rather quickly, which under normal circumstances would be something that I would not like, but let us be honest here: Bitcoin has a history of making sudden and erratic moves. Furthermore, now that we are getting through all of the headline risks involving Congress and new bills, it seems as if Bitcoin can perhaps go higher.
On the other hand, if the market were to break down below the 50-day EMA, then it could go looking towards the $35,000 level. After that, the market is likely to go looking towards the $30,000 level which was the bottom of the range that we had previously been in. That consolidation area measured for $10,000, and now that breaking out of that $40,000 has happened, the movie extrapolates to the $50,000 level. Furthermore, you can make an argument for a little bit of a bullish flag that has kicked off, which measures for the same exact target. I would not be a seller Bitcoin anytime soon, so at this point in time it is only a matter of looking for “cheap Bitcoin.”
