- BTC/USD continues to look very limp overall, as almost nothing happened during the day on Tuesday.
- At this point, we are sitting just above the 50-Day EMA, but I don’t necessarily think that the indicator will offer massive support.
- I think this is a situation where you will see the market drift back towards the bottom of the range that we had been in, meaning that it’s very likely that Bitcoin will find its way back down to the $18,000 level given enough time.
The $18,000 level has been important more than once, and I think we will continue to see that level respected. I also believe that this is a market that will eventually break through there and open up the possibility of a move down to the $15,000 level. Adoption of Bitcoin is nowhere near where it needs to be to make this in demand. Ultimately, I think we are stuck in a range in the short-term, but longer term we are still going to be bearish and with the Federal Reserve meeting on Wednesday, it’s likely that we will see the US dollar spike once people realize that the Federal Reserve is done playing games.
Problems Ahead
There have been hopes that the Federal Reserve would step away from tightening as aggressively as it has been, since the Bank of Canada and the Reserve Bank of Australia have decided to slow down the pace of their monetary policy. Quite frankly, that’s not how it works, and inflation in the United States is still raging. With this being the case, the market is going to continue to see a lot of problems, and I do think that the negative momentum will be an issue going forward.
It’s not till we break above the $25,000 level that I would consider this a market that is breaking out, and therefore it’s probably not going to be anytime soon as we are still $4500 away from that happening. Furthermore, tight monetary policy tends to kill risk appetite, and Bitcoin is extraordinarily far out on the risk appetite spectrum. In other words, this is just not the macroeconomic environment for Bitcoin to be something that people want. Because of this, I think it’s probably only a matter of time before we drift lower.
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