Potential signal:
- I’d be a buyer of Bitcoin closer to the $81,000 level, with a short-term target of $85,000.
- I would have a stop loss at $79,000.
The Bitcoin market rallied slightly during the trading session on Tuesday, as we continue to see a lot of back and forth noise. Furthermore, we also have the 200 Day EMA sitting just above, and that could cause a bit of resistance. Ultimately, Bitcoin continues to struggle overall, so this should not be a huge surprise if in fact we do see Bitcoin fail at that level.
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However, if Bitcoin rallied from that level, then the $88,000 level would more likely than not be the next barrier that traders will be watching. If that ends up being the case, then I think you have to be very concerned about whether or not we can break above there and test the crucial $90,000 level. The $90,000 level of course has been the top of the recent consolidation area, so I think it does make a certain amount of sense that we do in fact see a major reaction in that area. After all, if we were to break above that level, it could be a completely new dynamic in this market.
Technical Analysis
The technical analysis for Bitcoin depends on the timeframe we are talking about, but at this point in time you have to recognize that Bitcoin has been very sideways for a while. If that continues, then it becomes a timeframe that we look for accumulation, as longer term Bitcoin owners typically will at to their position because there are so many “true believers.” This is what I’ve been doing in little bits and pieces on a weekly automatic purchasing program, but if you are a short-term trader, then it becomes more tactical and going back and forth here. I think given enough time we probably see a lot of choppy and sideways action, and therefore you need to keep in mind that a little bit of patience probably goes a long way here. That being said, I do believe that Bitcoin eventually goes much higher.
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