Bitcoin markets turned around right away on Friday to wipe out the losses from Thursday, as cryptocurrency markets continue to get a bit overdone. Nonetheless, this is a bullish sign, and it looks as if we are ready to go looking towards the $50,000 level which, based upon the technical analysis, makes sense on several fronts.
You could make an argument for a bullish flag which measures for a move above the 50-day EMA, but even before we had that form, we had a previous bullish flag which sat right at the top of the previous consolidation area that sat between the $30,000 level and the $40,000 level. Because of this, the market measured for a move to the $50,000 level, as it was the $10,000 consolidation region. Bitcoin is starting to pick up more inflows as we are looking at the possibility of inflation pushing crypto higher as well. The US dollar has lost a bit of strength during the trading session on Friday, so that has had its say in this market as well.
If we do pull back from here, the $40,000 level should offer quite a bit of support based upon the previous action and the fact that the 50-day EMA is sitting right there. On the other hand, if we turn around and break above the $50,000 level then we will probably go looking towards the $60,000 level, but there is a significant amount of resistive noise between here and there, so I think at best it would be a very choppy and difficult situation. Ultimately, it would take a huge move to the upside in order to reset the $60,000 level, but that would not be anything that we have not seen happen here before.
The fact that we saved the market at the $30,000 level was crucial, because then it sends Bitcoin back on track to resume the overall uptrend. With this being the case, I think that it is only a matter of time before we go even higher, so if you are an investor, holding on to Bitcoin certainly works. However, if you are highly leveraged trader, you need to see pullbacks in order to pick up a bit of value.
