Bitcoin pulled back just a bit on Wednesday but found a bit of support all the way down at the $20,000 level. Congratulations. Finding support at the $20,000 level should not be a huge surprise, but it’s only a matter of time before we see the market try to bounce a bit. The market will almost certainly bounce from here, but that bounce is something that people will start selling again. After all, imagine being reckless enough to buy the market during the previous consolidation, and getting the opportunity to get out of this horrible trade at a breakeven type of situation will be too good to pass up.
If we did somehow break above the $32,000 level, the market is likely to continue to see plenty of sellers above anyway. Ultimately, any time we see a bit of a rally, the first signs of exhaustion will have people panicking again. Alternately, if we break down below the $20,000 level, the market would be more likely than not to open up even more downward pressure. At that point, the market should go looking to the $12,000 level, which is the next major area of noise in general.
Ultimately, no matter what happens next, we will see a lot of volatility, and it’s likely that we see a lot of back-and-forth momentum, so at this point in time, you need to be cautious with your position size. Quite frankly, if you are bullish on this market, you probably have an opportunity to build up a larger position at lower levels, so I would be very hesitant to jump “all in” when it comes to Bitcoin. The hammer for the trading session does suggest that we might get a little bit of a bounce, but it is going to be short-lived. As long as monetary policy is rather tight and there are a lot of concerns when it comes to the global economy, I just cannot imagine a scenario in which people will be throwing a lot of money at Bitcoin. Sure, maximalists will, but they tend to wear massive losses along the way as well. Ultimately, you have all the time in the world to get involved in It going to be upside if you choose. The Bitcoin market needs to rally before the rest of the crypto markets can, so everybody is going to be watching this.
