- The Bitcoin market has broken significantly during the trading session on Monday but then turned around to form a bit of a hammer.
- This market will continue to see the $18,000 level is crucial, and therefore it is an area that we need to pay close attention to.
- If we were to break down below the $8000 level, that opens up the possibility of a much more significant drop.
Possibility Of a Drop to $12,000?
When you look at this chart, you can see that we have been consolidating for a while, and if we were to break it down below here, then it’s likely that the market could go much lower. In that situation, it’s very likely that we could see the Bitcoin market drop all the way down to the $15,000 level, possibly even the $12,000 level. The $12,000 level is where the market had originally taken off from during the last massive bullish run, so there should be a lot of market memory in that area. I am going to continue to look at this through the prism of building up a bigger position if and when I get an opportunity, I am going to start building up a bigger position to hold onto for quite some time. At this point, the market would more likely than not continue to see a lot of interest in that area, but it is probably best thought of through the prism of building up an investment. I do believe that Bitcoin will turn around eventually, but we need to be very cautious about jumping into the market with both hands.
The 50-Day EMA sits above the $20,000 level, so I think if we do rally, the upside is somewhat limited. In that situation, I just simply looking at this through the prism of “fade the rally” going forward. I think this is more likely than not going to be a market that eventually breaks down rather significantly, and I do think that you have a long amount of time before you need to look at this as a market you need to be buying. The Federal Reserve needs to change its monetary policy to make that happen, something that they are not going to be doing anytime soon. Ultimately, I think this is a situation where a little bit of patience will go a long way.
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