Bitcoin pulled back ever so slightly Tuesday as we continue to see a lot of nothingness, or what could be thought of as “Brownian motion.” Bitcoin has no real sign of strength at this point, so when I look at this chart it’s apparent to me that we have just formed a massive “H pattern”, which is typically very bearish.
Even if the market were to rally from here, I think there is a significant amount of resistance near the $22,500 level, and then again at the 50-day EMA which is sloping lower, sitting at the $25,000 area. The market will continue to see a lot of dynamic resistance based on that indicator, which is quite often followed by technical traders. If the market were to break above there, then Bitcoin needs to pay close attention to the $28,000 level, which extends all the way to the $32,000 level.
On the other hand, if we were to break down below the $18,000 level, it’s likely that we could drop to the $15,000 level, maybe even the $12,000 level after that. This is a market that’s been in a downtrend for quite some time, and for a lot of different reasons. To begin with, crypto is not trusted at the moment, because so much fraud and deceit have been exposed. Ultimately, this is a market that needed to clean itself up, and that’s what we are seeing. This is not necessarily the fault of Bitcoin, but Bitcoin is the first place institutional money goes into and therefore jumps out of. Bitcoin is a harbinger for the rest of crypto, so until I can take off to the upside with any type of consistency, the rest of crypto will suffer.
Once we get down to the $12,000 level, it’s very likely that a lot of accumulation will begin. We could see a long “crypto winter”, and I think a lot of short-term accumulation turns into long-term accumulation, making fortunes for those who are patient enough to wait for the next bull cycle. I don’t see that happening anytime soon, so I don’t feel necessarily compelled to jump into this market anytime in the near term. If you have the ability to trade the CFD market, you may have moneymaking opportunities to the downside.
