- The BTC/USD has done very little during the trading session on Wednesday, as we continue to see more sideways action.
- We recently had seen a huge shot higher, which was pretty impressive considering there’s so much fraud and crime when it comes to crypto these days.
- FTX and Gemini are both potentially lethal time bombs, and then of course we have a Silver gate, which is the crypto bank that is basically being exposed as a fraud. In other words, there are plenty of reasons to think that the crypto markets and crypto traders would come undone.
That being said, the “smart money” gets in early, and probably started selling about 65% higher. Whether or not Bitcoin survives is a completely open-ended question, but right now in the short term, it looks as if it is at least trying to fight back. The 200-Day EMA sits near the $21,000 level, so that should be paid attention to if we get a bit of a pullback. If we were to drop below the $20,000 level, then I think Bitcoin has issues. On the other hand, if we turn around and take off to the upside and break above the $23,000 level, then it’s possible that $25,000 gets targeted.
Pay Attention to the Federal Reserve
The one thing that I think you should probably pay attention to is the Federal Reserve. I understand that Bitcoin is supposed to operate “outside of the banking system”, but it doesn’t. With a tightening of the monetary policy over the last year, we have seen Bitcoin get eviscerated. Now traders are starting to bet on the Federal Reserve either loosening monetary policy or at least pausing on it and if that’s the case it should in theory at least, help Bitcoin. This is because people will be willing to take risks. The real danger of course is that the Federal Reserve stays tight for longer than anticipated.
Bitcoin is highly speculative for institutional traders, and venture capitalists are not throwing money at Bitcoin-related businesses like they once were. All of this leads to headwinds for Bitcoin, and quite frankly this bear market has not run that long. I don’t necessarily think that we go to zero, but it would not surprise me at all to revisit the lows before it’s all said and done. Having said that, all you can do is follow the price.
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