- Bitcoin rallied again during the trading session on Monday, as we are now well above the $125,000 level.
- The $125,000 level is a large, round, psychologically significant figure that caused a bit of a headache over the weekend, but ultimately, I think we’ve got a situation where Bitcoin continues to go higher. If we pull back from here, the $120,000 level is a potential support level, followed by the $117,000 level, as it has been important multiple times.
Risk Appetite
I think part of this is driven by risk appetite, but it’s also driven by the idea that traders may be looking to put money in other places than the US government at the moment. After all, the US government is shut down, and that always has some of the more esoteric traders out there looking to get away from the US dollar. Ironically, we might end up seeing Bitcoin in the US dollar take off over the next several weeks, but it’s clear to me that the Bitcoin market has decidedly rallied enough to suggest that we are, in fact, going to continue to go higher over the longer term.
In fact, I don’t have any interest in shorting Bitcoin until we get below the 50 Day EMA, and even then, I probably would wait until we get below the $109,000 level. Keep in mind that Bitcoin does tend to be very volatile under the best of circumstances, so you would have to be cautious with your position size, but I think you’ve got to look at this as a market that still favors the upside, and I think you still start to look at buying the dips as a potential value play. At this point, we are probably looking at the possibility of going to the $130,000 level, which is the next large, round, psychologically significant figure.
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