The Bitcoin market went back and forth on Tuesday as we continue to see negativity, but eventually, the market needs to take a bit of a breath. That’s what we saw on Tuesday, as markets don’t go in the same direction forever. At this point, it’s likely that we will see rallies sold into, as Bitcoin is nothing short of dead money. Even if we do get a nasty rally, it’s going to be very difficult for Bitcoin to break above the $32,000 level.
Speaking of the $32,000 level, the 50-day EMA is sitting at that area and drifting lower. The 50-day EMA tends to be an indicator that a lot of people pay attention to, so it’s likely that we would see further downside even if we do get to that area as a lot of people who “bought the dip” as Bitcoin started to hang around the $30,000 level will be looking to get out at break-even if they can. After all, there have been horrific losses as of late, and it looks like there is no real demand for Bitcoin going forward.
We have yet to see a real-life use case for Bitcoin. Although there have been a few examples here and there, it just has not seen the widespread adoption that people would need to get involved then to make Bitcoin worth anything. Yes, I recognize that Bitcoin has been bid up rather high, but I look at it as a speculative instrument, simply digits on a computer that I can trade back and forth. That’s not me deriding Bitcoin, because I feel the same way about foreign currency markets.
On the other hand, if we do break down below the bottom of the candlestick for Tuesday, that means that we will see even more negativity, and Bitcoin will attack the $20,000 level. I fully anticipate this happening sooner or later, and for that matter, I believe that Bitcoin will break through it. At this point, I have a price target of $12,000, and there’s not much on the longer-term charts that suggest we could not get down to that area. As far as buying is concerned, the best-case scenario I can think of is that we fall rather hard, do nothing for several months or years, and start accumulating again like we did last time Bitcoin fell apart.
