Bitcoin rallied a bit on Tuesday as we continue to see a lot of noisy behavior. However, this is a market that is very negative overall, so I do think that it’s only a matter of time before the downward pressure picks back up and sends Bitcoin below the $20,000 level. Over the weekend, the market had reached down to the 17,500 level before bouncing, and it makes quite a bit of sense that we would see that level defended again. However, if we cannot defend that level, that would be a horrible situation, and almost certainly would open up Bitcoin for a move down to the $15,000 level.
On the other hand, if the market were to turn around and break above the $22,500 level, then it’s possible that we could go higher, perhaps reaching to the 50-day EMA which is closer to the $28,000 level. That would of course be a very positive move, but I think there’s enough noise there to keep Bitcoin down. After all, it’s been in a downtrend for quite some time, and it’s going to take a lot for this market to change its overall attitude.
The $30,000 level is a major area worth paying attention to, as we have been very noisy in that area, so I think a certain amount of “market memory” could come into the picture. In fact, it’s not until we break above the $32,500 level that I would consider recovery in this market. That being said, this is a market that is going to continue to see a lot of volatility, which typically is not good for asset prices. After all, the market is going to continue to see more downward pressure than anything else, especially if the US dollar takes off again. The market has been in a downtrend for quite some time, and nothing has changed from a fundamental standpoint to make this suddenly something that I want to be buying. Crypto in general is in trouble, as risk appetite has been absolutely decimated. That being said, you do need to keep an eye on Bitcoin, because it will lead the rest of crypto, as it leads the way going forward. Nonetheless, this is a market that I think continues to capture a lot of headlines if nothing else.
