Bitcoin markets rallied during the trading session on Wednesday to reach towards the $65,000 level before pulling back. By rallying towards that area and then giving back the gains, this suggests that the market may be getting a little overextended, but one of the biggest drivers of this market could have possibly been the IPO in the United States of Coinbase, which is a cryptocurrency exchange. This brought a lot of “FOMO” into the cryptocurrency markets in general, so although it is somewhat ridiculous, it does seem to be the reason why we suddenly see a burst in the market.
By forming the shooting star that we have, it suggests that we are going to pull back a bit, but that does not necessarily mean that we are going to break down significantly. After all, the market has been very bullish for some time, so a little bit of a pullback would make sense. With that being the case, I think at this point we will probably find plenty of value hunters underneath, especially near the $60,000 level. If we were to break down below there, the market is possibly going to go looking towards the $55,000 level.
On the other hand, if we were to break above the top of the shooting star for the trading session, that would show that we continue to see more momentum jump into this market, perhaps opening up the possibility of a move towards the $70,000 level, which is my short-term target. That does not necessarily mean that we are going to see the market get there easily, but I anticipate that we will probably behave much like we did between the $50,000 level and the $60,000 level. At this point, I anticipate more choppiness like we had seen previously.
If we were to break down below the $50,000 level, we would have a little bit of a downtrend ahead of us, but I do not anticipate that that is going to happen anytime soon, so I look at pullbacks as potential buying opportunities. Furthermore, I believe that the crypto markets in general will continue to rally as I have seen some of the alt coins take off.
