The Bitcoin market had a relatively quiet Friday, which is something that people needed to see in order to suggest that the uptrend will continue. However, after the massive and nasty candlestick we had on Thursday, we are probably not done selling. Typically, when you get a massive “wipeout candle” like that one, there is some type of follow-through.
I suspect that we will see some short-term bullish pressure, but then maybe some more profit-taking along the way. That should drive the market back down towards the $16,000 level, which would be the next major support region. If we break down below there, we will go looking towards the 50-day EMA. The 50-day EMA historically has a certain amount of influence on what happens in the Bitcoin market, as it is a very technical marketplace.
The candlestick on Friday was a bit reassuring, but volume was somewhat thin as it was the day after Thanksgiving. Furthermore, the market had gotten ahead of itself by Thursday, and if you have been paying attention to my analyses at Daily Forex, you know that I was warning about this type of move. I think we have further to go, and there is no point in “paying up” for the market in general - especially as this one has a history of falling apart suddenly - only to turn around. Assume that you will get an opportunity to pick up value at lower levels again. Picking up value is the play here, because Bitcoin is starting to behave a lot like the stock markets, in the sense that no matter what happens, there are always going to be people out there willing to jump in and buy more. But there is no point in trying to buy all the way up here, when these moves typically do not happen in a vacuum. Above the recent action, the market has the $20,000 level, which causes a significant amount of psychological resistance as it was the previous all-time high. With this, I think you will get an opportunity to buy Bitcoin at lower levels.
