If you have been following me here at DailyForex as of late, you know the thing that I wanted to see was Bitcoin taking out the $51,000 level. It did pierce that level during the trading session on Friday, so I think we are finally starting to see a potential move higher. Bitcoin has been beaten down pretty significantly, but it is worth noting that the recovery has been slow and deliberate, which is something that you want to see after a big selloff like that.
It is also worth noting that the 200 day EMA sits just below the recent consolidation, so we got buying pressure right where you would expect to see it. Given enough time, it is likely that we will continue to rally, but the next couple of days could be a bit difficult for crypto markets in general due to the fact that liquidity will be a major problem. The candlestick for the day was not necessarily impressive, but it was a continuation of the overall momentum that we had seen over the last week or so. If we can break above the top of the candlestick, then I think the market will go looking towards the 50 day EMA above.
To the downside, I think the 200 day EMA will continue to offer support, right about the $47,000 level. At this point, as long as we can stay above there, the market looks like it is going to be fairly bullish. Yes, we may get a bit of a pullback, but that should be thought of as a buying opportunity. The Bitcoin markets corrected enough that all of the weak hands have been blown out. Ultimately, I think that we will go much higher, and it would not surprise me at all to see this market start climbing in January again. In fact, I do not see any reason why we do not capture the highs over the next couple of months. I have no interest in shorting this market, but I do recognize that any move below the $40,000 level could be rather brutal and catastrophic. I do not necessarily see that happening, but it is something that you need to keep in the back of your mind when trading something like Vitcoin. Volatility is going to continue to be a major feature, and you should keep in mind that volatility cuts both ways.
