Bitcoin rallied yet again on Friday as we continue to see markets find plenty of buyers on dips. That being the case, I think it is only a matter of time before we hit the $50,000 level. The $50,000 level was previous support, so it could be a bit of resistance in the short term, but I think it is only a matter of time before we break above there as well. Pullbacks at this point should continue to attract plenty of attention, especially near the $45,000 level which has been supportive of the last couple of weeks and of course is a “midcentury mark” when it comes to a bigger timeframes.
The 50-day EMA sits just above the $40,000 level right now, and it makes sense that it should offer plenty of support going forward. I think ultimately this is a market that will find buyers if we do get down to that area, but it is so far below us right now that it is difficult to even think about it. There is absolutely nothing on this chart that looks bearish, and the only reason that I would be cautious about the market right now is that we are getting close to that big figure. Nonetheless, we have sliced through the $50,000 level previously, so it will not be as surprising this time around.
As far as selling is concerned, I do not really have a plan but if we were to break down below the $40,000 level, I would have to stand up and take notice, because it could be negative in general. After that, the market could go looking towards the 200-day EMA, which typically attracts a lot of attention as it is an indicator that longer-term traders pay close attention to. Breaking down below the 200-day EMA would obviously be very negative, but by then we might have a completely different narrative when it comes to this market. At this point, it looks as if the $30,000 level was in fact the floor on the pullback. I am a bit surprised that we did not get a deeper correction, but it is what it is. At this point, one would have to think that we will continue to go much higher over the longer term.
