The Bitcoin market initially rallied significantly during the trading session on Monday, as the weekend trading was rather bullish. The fact that we broke above the $40,000 level is a good sign, but the fact that we also turned around and fell below it again is not. With that being the case, I think we will continue to see a lot of resistance just above as the Bitcoin market continues to struggle to find its footing in general. Ultimately, this is a market that I think will attract a lot of attention, but I think we are still very much stuck in the same range that we have been in for a while.
The $40,000 level has been a bit of a conundrum for the market, and it now looks as if we are struggling yet again. If we break down below the hammer from the previous session on Sunday, then we could break down towards the 200-day EMA near the $36,000 level. If we break down below there, then it is likely that the market could go looking towards the $30,000 level. The $30,000 level is massive support, and after this massive bounce, if we were to turn around and break down through that level, it would be an extraordinarily negative sign. Breaking down below that opens up the possibility of a move down to the $20,000 level. Giving that up would be a massively bearish sign.
To the upside, the $50,000 level would be the potential target on a breakout, which has seen quite a bit of resistance built into it. This is because we had seen so much in the way of support previously, and it is a large, round, psychologically significant figure. Furthermore, the consolidation area that we had previously been in measured for $10,000, so that measures for either $20,000 on a breakdown underneath or a move to the $50,000 level above. I think we are waiting for some type of technical move to get moving in one direction or the other, as we are still dealing with the fallout of the destruction of the Chinese Bitcoin mining sector. I think we are getting close to a bigger move, but right now it should be noted that $40,000 continues to be a major issue.
