- Bitcoin initially rallied during the trading session on Tuesday, but we continue to see a lot of noise just above the current levels, causing a lot of headaches.
- The $113,000 level is an area that's been important for a couple of weeks and the 50-day EMA happens to sit there as well.
- I think Bitcoin's got a bit of a fight on its hands due to the fact that risk appetite is atrocious at the moment.
There are concerns about the overall global economy slowing down as we have seen suddenly the US employment numbers starting to dip. If that's the case, then the expectation is that the Federal Reserve will cut interest rates and while that typically would help Bitcoin, it kind of depends on why they are doing this. If they do it in a bit of a panic move, that probably has people selling anything and everything to get liquid again, and that would include Bitcoin, especially if they bought it a while back. In that environment, we could break down below the $107,000 level and then go look into the 200-day EMA.
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If things take a little bit more of a positive turn, then breaking above the $113,000 level on a daily close, I think it opens up a slow grind higher toward the $117,000 level, followed by $120,000. Ultimately, Bitcoin is still in an uptrend over the longer term, but recently we've seen a lot of sideways action, and I think at best that's probably what you're going to get here.
If you're a longer-term holder of Bitcoin, then maybe these dips present a little bit of an opportunity for you, but you have to be cognizant of the fact that we could get a fairly sharp decline if things really start to unravel into other markets. Bitcoin was once detached from everything else; it's now an institutional asset and therefore behaves like it's on Wall Street.
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