The Bitcoin market was relatively quiet during the trading session on Thursday, losing over 1%. However, what’s worth paying the most attention to is the fact that he had pulled back from the 50 Day EMA. The 50 Day EMA is an indicator that a lot of retail traders pay attention to, so it does make a certain amount of sense that it would cause some resistance. What’s even more worth paying attention to is the fact that the previous candlestick on Wednesday was a shooting star, showing that we are struggling with the idea of getting above the $24,000 level.
The market has recently broken out of a short-term consolidation area, but that does not mean that the trend has changed. In fact, I think the trend is still very much on the downside and it’s likely that the market will continue to see sellers when they get a bit of an opportunity. After all, crypto continues to struggle in general, so if that’s going to be the case is difficult to imagine why we would suddenly go higher.
You have to keep in mind that Bitcoin is pretty far out on the wrist spectrum, and as long as people are so skittish about risk appetite, Bitcoin will be a bit of a virtual punching bag at times. Furthermore, the US dollar has been strengthening, and as long as that’s going to be the case, Bitcoin will lose in that argument.
We also need to keep in mind that there was a negative reaction after Tesla announced that it sold something like 75% of its Bitcoin holdings, which shows you just tell retail drive in this market is. That doesn’t mean anything at all, only other than the fact that Elon Musk dumped Bitcoin at a higher price. In other words, Bitcoin and other crypto weren’t necessarily being used as cash on a balance sheet, but as a speculative asset to bring more fiat currency into the company. That should not be a huge surprise at all. Because of this, the market continues to see a lot of back-and-forth, and even if we did break to the upside I think that the $28,000 level is going to cause a significant amount of resistance, as it was a previous support barrier.
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