Bitcoin has initially tried to rally during the trading session on Wednesday but gave back gains as we reached the 50 Day EMA. At this point, the market has shown its proclivity to pull back from that level, and I think that is going to continue to be the case. The 50 Day EMA is something that a lot of traders will pay attention to, and therefore it is worth watching. It is also worth noting that it continues to go lower and drift towards the $40,000 level.
Speaking of the $40,000 level, it is worth noting that the market continues to find it of importance, and a bit of a magnet for price. As long as that is going to be the case, then I think it is probably only a matter of time before we return here. It is worth also noting that we have been in a larger consolidation area for a while, and now it looks as if we will continue to see the $45,000 level above offer a significant amount of resistance, while the $35,000 level underneath continues to offer just as much support. We have essentially been going nowhere for a while now, and I do not necessarily believe that is going to change anytime soon.
With the Federal Reserve tightening monetary policy, this will work against high-risk assets, and Bitcoin most certainly is one of those. Because of this, I think we have a situation where you need to be cautious but accept the fact that if you are going to buy Bitcoin, it could be rather dangerous. After all, Bitcoin does have a history of being very volatile anyway, and the fact that we have so much going on in the world it is not a huge surprise to see a massive spike in one direction or the other at any given moment.
At best, I would say we are consolidating. However, it is also possible that we may be getting ready to plunge lower again, opening up the possibility of a move towards the $30,000 level. Breaking down below the $30,000 level opens up “crypto winter” when crypto does nothing and essentially goes to sleep. I am not quite ready to call for that yet, but it is obvious that crypto is on its back foot and is not attracting much in the way of attention.
