Bitcoin initially fell on Wednesday to reach down towards the 50-day EMA. By doing so, the market has confirmed potential dynamic support, so it makes sense that we would see a recovery. At this point, the most likely of outcomes will be that we will go looking towards the 200-day EMA above, currently residing at the $44,355 level. Just above there, we have the $45,000 level which in and of itself is crucial, due to the fact that we have seen resistance there multiple times.
Underneath, the $40,000 level should be a potential support level, as it has been important multiple times in this market. If we were to break down below the $40,000 level, it is likely that we could go looking towards the $38,000 level. Ultimately though, this is a market that looks as if it is ready to break to the upside, but we need to get beyond that $45,000 level to make the move a bit of a confirmation move.
If we do break out to the upside, it is likely that we will see this market looking towards the $50,000 level above. That is an area that should be important, so if we were to break above there, the market is likely to go much higher and attract quite a bit more in the way of buying pressure. The Bitcoin market will lead the rest of the crypto markets either higher or lower, so it is worth noting that the Bitcoin chart is worth paying attention to, even if you are trading other coins.
Pay close attention to risk appetite, because it has a huge influence on what happens here, as Bitcoin is far out on the risk spectrum. The market has been banging around in multiple directions over the last several months, as we are trying to figure out which direction we are going to go for the longer term. As things stand at the moment, it looks like we probably have more upward pressure than down. That being said, the range of the candlesticks has not been very big, so you cannot read too much into the directionality other than buyers are probably more aggressive than sellers, but not overwhelmingly so. At this point, short-term pullbacks are buying opportunities, but you need to be very cautious about your position sizing.
