The Bitcoin market rallied yet again on Wednesday as we continue to undulate back and forth in the same consolidation area just below the $50K level. The $50,000 level above offers a certain amount of resistance, and because of that the market is going to struggle in this area, as we try to determine when we have the momentum necessary to go much further. If we can break above the $50,000 level on a daily close, then the market is likely to go looking towards the $55,000 level. After that, then it is likely that the market could go looking towards the $60,000 level next, as there is a lot of noise between here and there, but the $60,000 level had been the prize most traders were trying to take out previously.
To the downside, if the market were to break down below the $45,000 level, then it is likely that we will test the 50-day EMA underneath, and then eventually the $40,000 level which is now starting to attract the 200-day EMA. In other words, I think that then becomes the “floor in the market” for Bitcoin. That being said, I do not think we will get there anytime soon, but with crypto, you need to realize that anything is possible at any moment. After all, the volatility is part of what people like so much about it. With this, I think the market will probably continue to see reasons to go long, as the narrative folds towards that direction.
I like the idea of getting long on dips, and I think most of the market feels the same way. Because of this, you need to again "follow the herd” despite what you may have been told. Crypto is very retail driven, even though there are a lot of institutions just now getting into the market. Nonetheless, I believe that the market is much more likely to break above the $50,000 level than it is to break down below the $40,000 level. If it did break down below that level though, that would obviously be a very negative turn of events and would have the crypto markets standing up to take notice of the sudden bearish pressure that occurred. That would obviously have something to do with the fundamental driver that we just do not have at the moment.
