- Bitcoin has dropped significantly during the trading session on Tuesday, but then found buyers underneath to push the market higher. By doing so, the market has shown itself to be somewhat resilient, but not necessarily bullish.
- After all, the fact that we could sit still was a bit of a victory in and of itself as Bitcoin has been where money has gone to die as of late.
- I don’t necessarily think that this is a buy signal for Bitcoin, but we probably have to recognize that at least we are not melting down.
Keep in mind that the risk appetite has to be strong for Bitcoin to do well, but it’s also worth noting that the issue at FTX continues to cause a lot of problems, as contagion is now front and center. That being said, there are rumors that there is a buyer for FTX, so one will have to wait and see how that plays out. In fact, the best way to play this market is to look at the longer-term consolidation between the $18,000 level underneath, and the $25,000 level above.
Killing Time
If we were to break above the $25,000 level, that opens up the possibility of taking out the 200-Day EMA, and then a move to the $32,000 level. If that were to be the case, it would obviously be very bullish, and at that point you could see a complete recovery by Bitcoin. Alternately, if we were to break down below the $18,000 level, then it sends this market much lower, perhaps down to the $15,000 level. After that, then we are looking at a very real possibility of a move down to the $12,000 level.
If we were to drop all the way down to the $12,000 level, then we have to look at that through the prism of a complete “round-trip” for this market from the last bullish run, and therefore one would have to think that there should be a line of buyers down in that area that would be willing to support the market. In the meantime, I think we are to simply killing time, trying to figure out whether or not we are in an accumulation phase, or if we are simply biding our time until the next major selloff in Bitcoin. At this point, it’s all about risk appetite.
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