Potential signal:
- I am bullish on bitcoin over the longer term, so if we get some type of pullback toward the $67,000 level, I will step in and start buying bitcoin, with a stop loss at the $65,000 level, and a target of $72,000 above.
- In other words, it is a “buy on the dips” market.
The bitcoin market rallied quite nicely during the trading session on Wednesday, as we have bounced from the crucial $67,000 level. The $67,000 level is a large, round, psychologically significant figure that a lot of people will be paying attention to, and it’s probably worth noting that the 50-Day Exponential Moving Average will continue to be of interest as well. With that being the case, I think it’s a situation where we continue to do much of the same behavior that we have seen over the last several weeks.
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FOMC and CPI
The Consumer Price Index came in 0.1% less than anticipated in the United States, and as a result traders are already starting to jump the gun and suggest that the Federal Reserve is likely to start cutting sooner rather than later. I don’t know if that’s the case, but it’s obvious that the market is running with that narrative.
The Bitcoin/USD pair looks as if it is trying to go looking to the $73,000 level, which of course is a large, round, psychologically significant figure, but more importantly, it is an area that has been resistant previously. However, we need to look at the idea that the FOMC meeting is later in the day, so it makes a certain amount of sense that we will continue to see a lot of volatility. With this being the case, the market is likely to continue to remain a “buy on the dips” market, but if we get the FOMC press conference sounding a bit more dovish than anticipated, bitcoin could really take off to the upside.
If we were to break down below the $66,000 level, then it’s possible that the market could go looking down to the $62,500 level, and then after that we would have a potential fight at the $60,000 level underneath which is a large, round, psychologically significant figure. Ultimately, this is a market that I think continues to see a lot of volatility, but there are plenty of buyers out there willing to get involved.
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