The Bitcoin market initially rallied on Tuesday but gave back gains above the $30,000 level. This is the third day in a row we have struggled to get above there, after forming a massive hammer last week. This is not a good look, and it suggests that the Bitcoin market is going to continue to struggle. With this, I think it is probably only a matter of time before we reach lower levels and go looking to break down to the $25,000 level.
Bitcoin is getting hammered as all risk appetite assets are. Because of this, the market is likely to continue seeing short-term rallies being sold into, as the market has shown quite a bit of hesitation to go far out into the risk spectrum. Even if we were to break above the top of the several candlesticks, the $35,000 level would be a potential target, but really I think at this point it is almost impossible to imagine that scenario as there will not be enough in the way of momentum to make that happen anytime soon.
If we were to break down below the $25,000 level, that will open up the floodgates and almost assuredly kick-off a “crypto winter.” In that scenario, I will be looking to buy bits and pieces of Bitcoin over the next couple of years, because it probably will not do anything for quite some time. I know this sounds extreme, but we have lost half of the value of Bitcoin in just a handful of months, and it looks as if we are going to continue seeing a lot of struggle.
In order for the Bitcoin market to take off for a bigger move, we would need to see the US dollar calm down. The US dollar is without a doubt the favored currency of traders around the world, and I think that will continue to be the case going forward. The market has too many things working against them to think that we are going to get bullish anytime soon, and even if you are bullish for the longer term, I believe you have quite a bit of time before you have to get aggressive to the upside. Bitcoin looks miserable, right along with the rest of crypto.
