Bitcoin markets initially tried to rally a bit on Tuesday, but then gave back gains to show signs of negativity yet again. At this point in time, the market looks very likely to continue seeing downward pressure, but the $40,000 level underneath needs to be paid close attention to due to the fact that it is a large, round, psychologically significant figure, and an area that is supportive based upon what we have seen previously. With this being the case, I think that the $40,000 level probably has a lot of people waiting to pick things up. That being said, if we were to break down below that level then it changes a lot.
I would state that the $40,000 level probably has support down towards the $38,000 level. Breaking down below that area then opens up a lot of selling pressure that could cause some serious issues. At that point in time, I would anticipate that the market would probably go looking towards the $30,000 level underneath, which is the next psychologically important figure, and an area where we have seen a lot of support previously. Because of this, I think that the market will ultimately look at that as a potential bottom if we do get down there, due to the fact that there had been so much trading in that general vicinity previously. Because of this, the market is going to continue to be very noisy, and in that area, I would anticipate a lot of value hunting.
With the Federal Reserve looking to tighten monetary policy, a lot of traders out there are completely freaked out and I think it is worth paying attention to the idea of fear causing a lot of issues and dumping Bitcoin as well as other currencies in the crypto markets. That being said, the market is still one that offers a lot of value on major dips, and I think that we will eventually see the longer-term holders come in and pick things up. In fact, we are already starting to see reports of so-called “whales” pulling coins off exchanges, meaning they are willing to hold onto them in this area here. With this, I do think that it is only a matter of time before we bounce and go higher, but the question is whether or not we can hold onto 40K.
