Bitcoin fell a bit on Wednesday again as we see the $30,000 level act as a bit of a magnet for price. The market certainly looks as if it has nowhere to be, so therefore I think it’s probably going to be a situation where we need to wait for the markets to show signs of life that we can take advantage of.
If we break above the $32,500 level, it’s possible that we could get a short-term rally that opens up and moves to the $37,500 level. That being said, it would be a short-term opportunity more than anything else. If we do break to the upside, it will more likely than not offer some type of exhaustion that we can take advantage of to the downside. After all, the market has been in a situation where every time there has been a little bit of a rally, sellers have come in and punished Bitcoin again.
On the other hand, if we were to see this market breakdown below the $28,000 level, I think it opens up a significant amount of selling pressure in the Bitcoin market that could send it down to the $25,000 level. The $25,000 level did cause a significant bounce the last time we visited the area, but if we break down below there, and I think we probably would in that scenario, the market is more likely than not going to go down to the $20,000 level.
The $20,000 level opens up for a “crypto winter.” Because of this, if the market order breaks down below there, you would see crypto, in general, do nothing. I think that is the most likely of scenarios, as crypto has been left in the dust. Certainly, there are a lot of altcoins that are going to go to zero. I don’t think that will happen with Bitcoin but the reality is that it leads the rest of the markets, and if we break down below the $20,000 level, the next area would more likely than not go looking to the $12,000 level. This was where we had broken out for the huge move over the last several years, so it would be a complete “round-trip.” As adoption has been miserable, and the US dollar has strengthened, it is the move that makes the most sense.
