- Bitcoin has dropped a bit during the early hours on Tuesday as we continue to see a lot of noisy behavior.
- This will be interesting because we head into the holiday season, and the lack of liquidity, because who knows what will happen with Bitcoin. Remember, unlike most financial assets, it will actually be trading.
Market Consolidation and Key Levels
We could see some fireworks over the next couple of days, but I will approach this from a longer-term standpoint because it is really the only way you could do it reasonably right now. And what I see is consolidation. I see a massive floor in this market that extends from $84,000 down to the $80,000 level. If we were to break down below there, I think Bitcoin would be in massive trouble at that point.
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Short-term rallies are going to be possible, but I also recognize that they are not to be trusted, at least not quite yet. We would have to, at the very least, clear the $94,000 level to look upon this with favor and like we are going to rally significantly. At that point, maybe the $100,000 level is your next stop, and then you try to take out the 200-day EMA.
I think between now and the end of the year, the most likely path will be sideways. However, if I had to pick a direction until something changes, there is a lot of downward pressure here, and I think Bitcoin is under a bit of stress. It has sold off quite drastically, and when you look at the longer-term chart, you can make an argument for a lot of support in this area from a previous pullback.
We will just have to wait and see. That is what makes me nervous, though; if we were to break $80,000 to the downside significantly, that would be a very structurally bad sign. This is a market that, of course, moves on risk appetite and risk sentiment quite often, and right now, I do not know that it is really that high. So with that being said, if you are longer-term, you might be accumulating here. If you are short-term, you might just play the range. I do think that the next couple of days will be more range-bound and therefore it opens up that opportunity.
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