Bitcoin Forecast: Building Trading Range

Christopher Lewis

The Bitcoin market went back and forth during trading on Friday again, as we yet again see the $10,000 level offer a significant amount of resistance. By pulling back the way it has, we ended up forming a slightly negative candlestick, but more importantly we have reaffirmed the $10,000 level has being crucial. At this point, the market has a significant amount of support underneath, especially near the 200 day EMA near the $8000 level.

Ultimately, this is a market that continues to see a lot of volatility but quite frankly it would not surprise me at all to see market participants to continue flocking back and forth. I think they 200 day EMA is enough to bring people when, and of course the $8000 level has a significant amount of psychological importance. That being said, as you can see by the Fibonacci retracement tool that I have left on the chart, we have pulled back 100% of the short term selloff. The candlestick for the day certainly shows just how cautious traders are in this market, as they are a bit skittish as we get close to the $10,000 level.

All of that being said, if the market breaks above the $10,000 level on a daily close, it should then send this market much higher. That would be the last vestiges of resistance giving way for bullish pressure, and therefore it could allow the market to go much higher. At this juncture, it is highly likely that the market will have to make some type of decision but after the intense move to the upside, it is quite common to see the market have to digest gains. In that scenario, it makes quite a bit of sense that we bounce back and forth. If you are a short-term trader, then the $2000 range should continue to be followed, as the short term traders continue to see the supporting resistance hold. If we break down below the $8000 level though, it could send the market down to the $7000 level. On the other hand, if the market breaks above the $10,000 level then it is likely that we go looking towards the $11,000 level. In the short term though, I think this market is going to be more prone to simply bounce around. Short term opportunities present themselves for those who are willing to take them, as it is a clear battlefield.

Bitcoin

About the Author
Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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