The bitcoin markets rallied a bit during the trading session on Tuesday again, reaching towards the previous downtrend line. The downtrend line was pierced during the session on Monday, but we closed well below it. At this point, the market still hasn’t proven itself, but it certainly looks a bit encouraging for the buyers. At this point, it’s interesting to see how the idea of Fidelity investments getting involved in crypto currencies has provided a little bit help, even though it goes against the very nature of the idea of cryptocurrencies. However, if we do start to see a flood of institutional money, that of course will drive up the price, but it also will make Bitcoin susceptible to the same type of bubbles and rallies that other institutionally driven markets deal with.
At this point, I think we need to break above the top of the shooting star that formed during the day on Monday to start buying. If we can break above the top of that candlestick, then I think the market probably goes looking towards the $8000 level, perhaps $8250 after that. Beyond that, the $10,000 level would be the target.
We could break down, which would be defined as slicing through the $5800 level, as it would show the market breaking apart. If that happens, then I think the market could unwind to the $5000 level very quickly. Of course, we have been watching this support level hold up quite stringently for months now, so it’ll be interesting to see if we can finally break down below it. Right now, it doesn’t look like it’s going to.
The alternate scenario is that we just go sideways, and essentially do nothing. I think that might be the most likely scenario right now. Quite frankly, there’s no reason to get excited about Bitcoin, but it doesn’t seem to be willing to break apart either.
