Bitcoin fell a bit on Monday to break down and reach the $30,250 level. We have bounced since then, and it does suggest that there is a bit of support in this general vicinity. This is something that does offer a little bit of hope, but there are a couple of ugly candlesticks just above that could cause major issues.
The shooting star from last week pierced the 50-day EMA and brought in a bit of technical selling, and also offers a bit of a signal as to where the sellers may jump in. At this point, the market is likely to see an opportunity to start shorting in that general vicinity. Furthermore, it should also be pointed out that we are hanging about the $40,000 level, which is a large, round, psychologically significant figure. As long as that level continues to attract a lot of attention, I do not necessarily think that it is going to be an easy market to trade as there should be a lot of choppy volatility in this general vicinity.
You should keep in mind that the Bitcoin market is pretty far out on the risk appetite spectrum, and we need to have a lot of “risk-on behavior” when it comes to the markets overall in order to see a lot of money flow into Bitcoin. This is part of how the market has changed over the last several years, as institutional money has flown into the crypto markets.
If we break down below the $37,500 level, then I think it is very likely we go looking to reach the $35,000 level relatively soon. As things stand right now, the $35,000 level needs to hold in order for traders to have any serious hope of recovery. We have been consolidating for a while, but it should be noted that until recently, we have been drifting higher in general. That does not necessarily mean that is going to be easy to rally from here, but it is worth noting that we have at least seen a bit of stability in this market. Ultimately, I think that we will continue the overall range-bound short-term and choppy type of trading. If we were to take out the top of the shooting star which is at roughly $42,800, then we might have a potential move higher.
