- The BTC/USD market has fallen a bit during the trading session on Monday, as we continue to see this market threaten to break down below a support level.
- When you look to the left part of the chart, you can see that the market has seen a bit of support all the way down to roughly $18,250.
- If we were to break down below there, things could get very interesting, to say the least.
On a breakdown below the bottom of the recent support level underneath, then it’s likely that Bitcoin will drop down to the $15,000 level rather quickly. After that, then Bitcoin could find itself down at the $12,000 level, which happens to be the area of the market we had broken out from. That was the beginning of the massive bullish run that we have seen over the last couple of years, meaning that it would be a complete round trip.
Market Likely to Continue Falling
The 50-Day EMA sits near the $22,000 level and is dropping lower, offering a bit of technical resistance above. I do think that any rally now would more than likely must pay close attention to it. The candlestick on Monday shows just how weak this market truly is, and it looks as if we are going to continue to fall given enough time. All the Bitcoin market would need is for the US dollar to suddenly spike higher and show signs of blowing out risk assets. Remember, regardless of what people tell you, Bitcoin is not decoupled from the larger financial markets, and therefore we need to see risk appetite returned to have Bitcoin turn around and suddenly take off to the upside.
The only way that we are going to see any real strength in Bitcoin is going to be if the Federal Reserve changes its attitude and other markets take off. It should also be noted that Bitcoin is highly correlated to the NASDAQ 100, so pay attention to what that market is doing. If it rises, that might cause a short-term rally, but that market looks very negative to say the least, so it all comes down to a “risk on/risk off” scenario yet again, which has been the case on and off for 14 years.
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