The Bitcoin market pulled back a bit on Friday as we continue to see more “risk off” behavior around the world. That being the case, Bitcoin got sold off right along with everything else, but it is still very much in a consolidation zone that should continue to keep the market somewhat afloat. It is worth noting that we are hanging about the $55,000 level, an area that has been important multiple times in the past. Furthermore, the market does tend to pay attention to these $5000 increments, although not as significantly as the $10,000 increments.
Bitcoin continues to be in a strong uptrend, and even if we were to break down from here, the $50,000 level becomes even more interesting, due to the fact that the $50,000 level is not only a large, round, psychologically significant figure, but it is also an area where we have seen technical resistance previously, and the 200-day EMA is starting a resource that area as well. Speaking of moving averages, the 50-day EMA currently sits at the top of the candlestick for the trading session and is flat. Because of this, I think the market is trying to tell us that we are due for more consolidation.
One thing that is working against Bitcoin is the fact that the US dollar is strengthening. Unfortunately, far too many traders out there ignore the fact that the US dollar is part of this currency pair, and if the US dollar strengthens, it is not that uncommon for Bitcoin to struggle just a bit. Nonetheless, longer term, Bitcoin is still a market that we want to buy, so I do not have any real interest in shorting this market. If Bitcoin continues to drift lower from here, it only offers value from what I can see. If we can break above the $60,000 level, then it would obviously be a complete turnaround when it comes to momentum, offering the ability to get even more bullish of this market. We have recently seen a lot of volatility, but that is true across most assets, not just this one, as traders have taken a bit of a bashing from financial markets as of late. Most selling has probably been in the context of covering losses in other markets.
