Bitcoin rallied significantly on Wednesday to break above the $52,500 level quite decisively. This is a very strong turn of events, as Bitcoin continues to go parabolic. At this point, one would anticipate some type of pullback, but that pullback should be supported somewhere near the $50,000 level, which is going to be a large, round, psychologically significant figure. After that, we have a bit of a barrier that extends down to the $48,000 level anyway, as volatility and momentum has come back into the market.
At this point, it looks very likely that Bitcoin will go looking towards the $60,000 level, but like most traders, you have to be able to deal with a lot of volatility to get there. The thing about Bitcoin is that it could get there tomorrow, or it may take three weeks to get there. You just never know exactly what we are going to see in this market. That being said, by being cautious about your position size, you can add as it works in your favor. However, at this point, I would be much more comfortable buying Bitcoin on some type of value proposition.
Looking at this chart, we have shot straight up in the air for quite some time, so I do think that you will get some type of pullback. That being said, I would not be willing to jump into this market right away, rather I would put a little bit of a position on and wait to see if it starts to rise again. If it does, then I would simply add to that position. As far as selling is concerned, there is no argument to be made to do so until we break down below the 200-day EMA, which sits at the psychologically and structurally important $40,000 level. If we were to break down below there, then it is likely that the market would flush lower, perhaps reaching down towards the $30,000 level. That being said, it is a very structurally important level, and a bit of a zone of support, so I do not expect to see that area being busted through anytime soon. Short-term pullbacks should continue to be thought of as potential buying opportunities based upon value, at least in the short term.
