Bitcoin initially tried to rally during the trading session on Monday but found pressure at the 200-day EMA to turn things around. The market is closing towards the bottom of the range, sitting just above the $32,000 level. That is an area where we have seen buyers in the past, but unlike the last couple of weeks, we have seen the market close at this level. Until now, the market has bounced from here rather significantly during the day.
If we break down below the $30,000 level, and at this point I have to admit it is looking rather likely, the market will probably break down to go looking towards the $20,000 handle. That is an area that previously has been important, as well as resistance. It is because of this that I do believe there is a certain amount of market memory that will come into play at this area, so as things stand right now, I think we will break the $30,000 level to the downside and then drip down towards that area.
On the other hand, if we were to turn around and start rallying, I am not looking for any type of trade until we clear the $41,000 level on a daily close. That does not look very likely to happen anytime soon, so it is very likely that any time we rally, traders will come in and start shorting Bitcoin. Overall, the 200-day EMA is flat, which suggests that the market is trying to consolidate, but as we have spent a couple of weeks bouncing around this area, it looks as if we are trying to come up with a decision as to whether or not we are in an up or down trend.
If the US dollar were to suddenly spike again, it could send the Bitcoin market much lower, but it is worth noting is that the Bitcoin market has fallen even though the US dollar has as well. In other words, this is a strictly negative Bitcoin move. With that, I believe that we have much further to go and, as I line everything up, it is probably only a matter of time before we break down. The overall attitude of the market looks very sickly, but we are still trying to hang on to the edge of support.
