Bitcoin markets followed a sideways pattern over the last couple of days after forming a very parabolic move. This is not a huge surprise, because markets need to digest some of these big moves occasionally. With that being the case, think it is probably only a matter of time before we see the market continue the overall attitude of bullishness, but we may have a couple of days ahead that are relatively quiet. After all, the $60,000 level is a psychologically important barrier that a lot of people will pay close attention to. Because of this, I think it does make sense that we will see grinding sideways action, followed by an attempt to break the $60,000 level.
I do not expect that breakout to be easy, so this point I anticipate that we are more than likely going to see some type of fight on our hands in that general vicinity. If and when we get that move, I do believe that it is probably only a matter of time before we eventually do break out. This should offer plenty of “buy on the dips” types of trades on short-term charts, but if you are a longer-term trader, you probably are too worried about it.
If we do break down from here, the $50,000 level should offer plenty of support from both a structural and psychological standpoint, as we have seen so much in the way of action around that level. The fact that we sliced through it is easily as we did is a bit surprising, but previously we have seen a lot of noise around that juncture. With that in mind, I do not necessarily have any interest in trying to get too cute with this, as I recognize that we are probably going to continue to see a lot of “FOMO” entering the market as well. This is the way that Bitcoin almost always trades: it goes much further in both directions than you anticipate. Because of this, keep your position size reasonable and only add when the trade starts to work out in your favor. Having said that, if you are an investor you may look to add a little quicker, because you do not plan on selling anytime soon. The longer-term outlook is that we will probably make a fresh, new high again.
