I have no interest in buying this market in the short term, and at the very least we need to see a bit of stability before I get excited about trying to go long Bitcoin.
The Bitcoin market has broken down significantly during the trading session on Thursday to show signs of massive resistance at the $40,000 level. The $40,000 level is an area that a lot of people will be paying close attention to as it is a large, round, psychologically significant figure, and an area where we have seen a lot of trouble previously. Furthermore, you have to pay attention to the fact that the 50 Day EMA is sitting above there and rapidly falling. Because of this, it is very likely that we will continue to see sellers every time we rally.
I have been suggesting for a while that the area that we are at is an area of significant support and that it needs to hold. The next support level is the $35,000 level, and therefore it is likely that the market will test that area. If we were to break it down below there, then it is likely that the market goes looking to the $30,000 level. Bitcoin is going to continue to struggle in general, as risk appetite is getting smashed. The Bitcoin markets are considered far out on the risk appetite spectrum, so markets would need to be relatively calm for Bitcoin to continue attracting money.
If we were to turn around and close above the $40,000 level on a daily close, that would be a very good sign. However, I would even wait until we get above the 50 Day EMA, just for a little added confirmation. If we break above there, then the market is more likely than not looking to get to the $45,000 level, perhaps even the $47,500 level.
The only thing you can count on in the bitcoin market at this point is going to be massive volatility, as the market is getting hammered by not only a stronger US dollar but the fact that everybody is concerned at the moment about what is going to happen next with the global economy. It is likely that we will see Bitcoin struggle, and a breakdown could be a potential consequence. I have no interest in buying this market in the short term, and at the very least we need to see a bit of stability before I get excited about trying to go long Bitcoin.