The Bitcoin market had rallied rather significantly during the course of the trading session on Wednesday to pop above the $50,000 level but has also turned around to show signs of weakness. The $50,000 level offering a little bit of resistance is not what you want to see during the rally if you believe that a huge portion of the selling is over. I think the fact that we have seen so much in the way of selling during the trading session on Tuesday followed by a rather pathetic attempt to rally on Wednesday, suggests that we probably will continue to drop in order to break the $45,000 level. If we do, I think that is actually bullish in the longer term, because I can see quite a few traders willing to jump in somewhere closer to the $40,000.
The $40,000 level will feature the 50-day EMA sooner rather than later, and it is the area where we broke out of for the last leg higher. You cannot see the market go straight up in the air forever, so a pullback closer to the most recent breakout makes sense. The $45,000 level could hold, but it is not enough for me to think that a lot of “value” has been created.
When you look at the higher time frames, the market has gone straight up in the air for too quickly, and we are probably looking towards the market for some type of sign of opportunity. When something gains 40% in a month, that is not offering value by any stretch of the imagination. However, if you have already seen a massive push higher, and then a pullback, then that gives you the opportunity to get long.
On the other hand, if you have been long in this market the entire time, then you obviously have a lot more cushion to play with. I certainly would not be a seller of this market, but I believe that if you are patient enough you should get an opportunity to pick up Bitcoin “on the cheap.” The last thing we need to see if this point is Bitcoin skyrocket to the upside, and even though many of you are waiting for institutions to come in and pick the market up, they are professionals. They do not buy at high levels if they can avoid it.
