The Bitcoin market has found a little bit of selling yet again, so it looks like it will continue to go to the downside. If we can break down below the lows of the Monday candlestick, this could open up a move down towards the $40,000 level. The $40,000 level is being paid close attention to, as it was previous resistance and is a large, round, psychologically significant figure. Furthermore, the 200-day is starting to reach towards that area, so I do believe that it is only a matter of time before we would see some type of interest in Bitcoin in this general vicinity.
The fact that the market is closing towards the bottom of the range for the trading session also suggests that we are going to continue to see negativity, so at this point I believe that the sellers will continue to jump into the market on a break below the lows of the session, or perhaps the first signs of exhaustion after a short-term rally. It now looks as if the $50,000 level will offer significant resistance above as it had been previous support and has a lot of psychology attached to it as well.
A lot of people have complained that the Bitcoin market was moving in reaction to Elon Musk, but I think that is simply just an excuse for what had been going on. When you look at this market, it has been drifting lower for roughly 2 months. With that being the case, it is likely that the market will continue to see selling pressure in the short term, which will set up a bigger fight.
The risk appetite of traders has taken a serious hit as of late, not only in the Bitcoin market, but also the NASDAQ 100, as an example. That being the case, the market has followed right along with the trouble that we have seen over there, and I think in general what we are seeing is a scenario where sooner or later we will get a nice supportive candlestick that we can take advantage of. The 200-day EMA being broken to the downside and closing well below on the daily chart would be a very negative sign, perhaps opening up the possibility of a move down to the $30,000 level.
