- The BTC/USD has rallied slightly during the Wednesday session as we continue to go sideways around the $20,000 level.
- The $20,000 level is an area that should offer plenty of support, and therefore it makes sense that we are hanging around here.
- If we can break down below the lows of the last couple of days, then it’s possible that we could break down.
If we break it down below here, then it’s possible that the market could go looking to the $16,000 level, but I also recognize that there is a lot of noise here. Furthermore, you also have to understand that the market will continue to be a noisy one, especially as Bitcoin is so sensitive to various influences. The first one of course is the Federal Reserve, and as we have the jobs number coming out on Friday, it does make quite a bit of sense that we would see the markets do little. This is because people are trying to figure out whether or not we are going to see the Federal Reserve tighten monetary policy as aggressively as they are suggesting, or if the jobs market is finally starting to cool down and gives the market a little bit of hope for cheap money.
Markets Await Noise
Remember, Bitcoin is a risky asset, and therefore a lot of what you see in the market comes down to risk appetite. After all, the market is likely to continue seeing the Federal Reserve have an outsized effect on the crypto markets, which is a bit ironic considering that it is supposed to be independent of central banks. That is not true anymore, as institutional money has flown into the trading arena. They need cheap and easy money to feel comfortable about buying something as unproven as Bitcoin, and this is what you are seeing in spades at the moment.
The 50-Day EMA sits at roughly $23,000 and is dropping, so I think that could be a bit of dynamic resistance. The market will more likely than not be very noisy, but I think what we have here is a situation where you continue to fade rallies. When you look at longer-term charts, it’s not a huge surprise to me if we drop down to the $12,000 level, but I don’t necessarily expect that to happen overnight.
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