Bitcoin rallied just a bit on Friday, as we continue to hang about in the same general vicinity. That being said, the market has been chopping around and trying to form some type of base, but at this point we still have a lot of work to do before we turn things around. After all, there has been a major “risk off” attitude to the markets in general and it is likely that we will see continued selling pressure any time we rally. The $40,000 level above is going to continue to offer a lot of resistance, and think it will be difficult to break above there. That being said, we could get a short-term attempt to make that happen.
The 50 day EMA is getting ready to cross below the 200 day EMA, forming the so-called “death cross”, and that is a longer-term bearish signal. I do not trade based upon this, but I do know that a lot of people will pay attention to it. It is just another thing where we have another bearish attitude building signal. Regardless, I think Bitcoin is going to continue to struggle in the short term, but I do like it longer term. The $30,000 level underneath is going to continue to be important, and could be where we bottom. Do not get me wrong; this is a market that could turn around, but we need some type of attitude adjustment when it comes to risk appetite to make it truly stick.
I believe at this point it is likely that we will eventually get a long consolidation area to pay attention to and try to build a bigger position. The Bitcoin market also has a major influence on other markets in the crypto sphere as well, so even if you are not trading Bitcoin itself, you need to pay attention to this market if you are doing anything crypto related. The US dollar has a major influence on what happens here as well, so keep in mind that the inverse correlation should not be ignored. Nonetheless, this is a market that I think has some work to do, and the quieter that it is, the better off we will be. I am looking for a bit of an accumulation phase to start building up a big position.
