BTC/USD
The bitcoin markets broke through the significant $5000 level during the trading session late on Monday, and Wednesday was more of the same. We did bounce a bit towards the end of the day though so there is only some short-term hope. The $4500 level looks to be offering minor support but I don’t think it matters in the big scheme of things. If we do manage to bounce based upon the pseudo hammer, we could rally as high as $6000 and still more than likely find sellers. At this point, I look at rallies with suspicion, and I believe that the 50 day EMA will also add more bearish pressure.
The alternate scenario of course is that we break down below the bottom of the candle stick for the trading session on Tuesday, which would just extend more bearish pressure, perhaps reaching towards the $4000 level next. I believe at this point that rallies will probably attract more attention from sellers, based upon the fact that most of the heavy volume days, if you can call them that, have all been negative. This suggests that there is simply no serious interest in owning this market, and I don’t think that’s going to change anytime soon. Because of this, I think looking for some type of exhaustion on short-term rallies will probably continue to be the best way to play this market going forward.
In fact, it’s not until we break above the 50 day EMA that I would be comfortable buying this market, but even then I would be a bit cautious as there’s so much in the way of negativity out there. With a strengthening US dollar, this of course is not helping the scenario either.
