Bitcoin initially tried to rally during the trading session on Thursday but seems to have given back early gains to show signs of hesitation at the 50 Day EMA. The shape of the candlestick does suggest that we might have a little bit of negativity ahead of us, but I think it is probably only a matter of time before we would see sellers come back in and push the market back down. That being said, the market is more likely than not going to continue to see a bit of a barrier above.
Underneath, the $40,000 level should be an area of support, as we have a large, round, psychologically significant figure, and of course the fact that we have already seen the market react to it multiple times. Because of this, you should take a look at the hammer from the Monday session and assume that as long as we can stay above the bottom of the candlestick, there is still a possibility that Bitcoin can rally. However, it is probably worth noting that Bitcoin has underperformed as of late, and when you look at this chart you can see that although we have risen over the last couple of months, it has been a real fight.
Looking at this chart, it is obvious that the market will continue to see a lot of noisy behavior, and I think because of this you have to look at this as a market that is looking for some type of clarity. After all, the market has found no real sustainable move, and therefore I think what we are seeing here is a situation where we are trying to butt up the necessary momentum to break out above the 200 Day EMA, but it is obvious that we have not been able to do so.
On the downside, if we were to break down below the $37,500 level, then it is possible that the market goes to the $35,000 level next, and perhaps even $30,000 on some type of bigger move. I do believe that this is a market that longer-term will continue to grind overall, as we just do not have any real catalyst one way or the other to move. Quite frankly, I am not that impressed at this point in time.
