- Bitcoin initially plunged during the trading session on Friday, breaking well below the $56,500 level, which was where we had the significant pullback to.
- Several months ago, at this point, it looks like we are trying to stay in the overall consolidation range, and perhaps offers a buying opportunity.
- If we can break above the top of the candlestick for the Friday session, I think at this point, we take out the $60,000 level and then the 50 day EMA above at the $65,000 level.
All things being equal, the Bitcoin market is likely to continue to be very noisy. And now we have to ask questions as to whether or not the Wall Street traders are going to get what they want. After all, this is the “shiny new toy” on the Street, as the ETF continues to be an implement of traders to take a cut.
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Mt. Gox Effect
After all, they got that massive run higher when the ETF was announced. But keep in mind that Mt. Gox is releasing 141,000 Bitcoin into the market, and that does flood the market with a significant amount of supply. And that is something that's not easy to absorb right away. It's probably worth noting that the 61.8% Fibonacci retracement level has offered a bit of support and I think at this point you probably have a scenario where value hunters have come back in. Now the question is will we see any follow through? Keep in mind that Friday was very illiquid, so was Thursday, so was this just a blow off bottom? We'll have to wait and see, but taking out the top of the Friday session would probably bring a lot of confidence back into this market. We are most certainly in an uptrend still, but certainly we've done a lot of damage to the previous consolidation range.
Ultimately, this is a market that will continue to see a lot of people interested in owning Bitcoin, but there is a certain amount of hesitation after the significant selloff over the last few weeks. Can we return into the consolidation region? We will have to wait and see.
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