The Bitcoin market has rallied a bit during the trading session on Thursday as we continue to go sideways. Ultimately, the market is trying to figure out whether or not this is a floor, or if it’s Further to go to the downside. Quite frankly, it does not really matter at this point, because any rally will be treated with significant suspicion.
While I do not necessarily think that the market is going to completely collapse, the reality is that we could see a bit of a pullback from here. When you look at longer-term charts, it would not take much to imagine a scenario where we reached the $18,000 level, and then eventually break through it. If we did, it opens up the possibility of a move down to the $1200 level, an area that I think will continue to see a lot of support as well. This is based upon “market memory” that happened in that area, so I think it’s probably only a matter of time before we would see a bit of accumulation in that area. In fact, I would be more likely than not willing to start buying and building a big position.
If we do break to the upside, basically clearing the $22,000 level, it’s possible that we could go looking to the 50 Day EMA, and then possibly the $28,000 level. There is a massive amount of resistance between the $28,000 level that extends to the $32,000 level, and therefore I think it’s only a matter of time before we see exhaustion that will kick off more selling. I just don’t see the argument for Bitcoin taking off to the upside from here, at least not until the Federal Reserve does something about its monetary policy, and lifts the idea of risk appetite coming back into the financial markets.
As things stand right now, I think you have plenty of time to build up a position, so don’t feel necessarily overly pressed to get involved here. We are most certainly still in a downtrend and need to form a huge basing pattern before things turn around again and take off. In other words, this could be accumulation season, but I think there is so much time to do it that you can enter the market very slowly.
