Bitcoin fell a bit on Friday again, as we continue to see a crypto slump. While Bitcoin has held up much better than most other cryptocurrency markets, the reality is that Bitcoin looks miserable. The $28,000 level continues to be an area of support, but at this point, it looks like it is only a matter of time before we see this market fall.
It’s also worth noting that the $30,000 level has been a bit of a magnet, but it looks like we are starting to slip a bit. In fact, you could make an argument that we are forming a bit of a descending triangle. The descending triangle is a negative technical pattern that a lot of retail traders will pay attention to, meaning that we may see some type of negativity. At this point, it seems very likely that we are going to see an attempt to get down to the $25,000 level. We will probably see even more downward pressure, perhaps opening up the possibility of a move down to the $20,000 level.
Alternatively, if we do rally, I don’t have a scenario in which I’m willing to jump in right now. The $31,000 level is the top of the overall consolidation area, and if we can break above there it’s likely that we will then struggle with the 50-day EMA, presently sitting just below the $35,000 level. Above all that, the $37,500 level extends resistance all the way to the $40,000 level. It would take all of that for me to get bullish on Bitcoin again, and perhaps even some type of negativity with the US dollar. As the US dollar has been strengthening, it’s been like a wrecking ball for crypto as well as many other markets.
I believe that if you believe in Bitcoin longer-term, you will have an opportunity to buy it at much lower prices. There seems to be no real desire to buy crypto right now, not only Bitcoin but pretty much anything else in this market space. In other words, we are effectively seeing the market enter another “crypto winter”, as so much fraud and disaster has been found lately. As central banks tighten monetary policy, that’s yet another reason to shun crypto at the moment.
