Bitcoin seems a bit like “dead money” at the moment.
The Bitcoin market initially tried to rally during the trading session on Monday, but again has found lackluster momentum to say the least. In fact, volume has fallen off drastically, showing a real lack of interest in this market. Furthermore, the market is likely to see a lot of bearish pressure going forward, as the 200-day EMA is sitting just above near the $36,420 level. It is essentially flat, but what is even more interesting is that the 50-day EMA has crossed below the $40,000 level, and it looks as if we are about to get the “death cross” as the 50-day EMA crosses below the 200-day EMA.
The shape of the candlestick is a shooting star or an inverted hammer, which suggests that we are going to continue to see further bearish pressure. Underneath, we have the $30,000 level, which is a significant amount of support based upon what we are seeing previously and is a large, round, psychologically significant figure. The market is likely to attract a lot of headlines in that area, so if we were to break down below the $30,000 level, the market is likely to drop towards the $20,000 level.
The $20,000 level underneath is another large, round, psychologically significant figure as well, as the $20,000 level has not only the big figure attached to it, but it is also where we had gone top-down previously during the major bubble a few years ago. If we were to break down below there, then I think this market would fall apart and continue to go much lower. On the other hand, if we were to turn around and break above the 200-day EMA, it is likely that the $40,000 level would continue to be a major resistance barrier. In fact, I believe you cannot be a buyer of the Bitcoin markets until we break above that level, or at least see some type of momentum to the upside. We do not have that right now, and it is likely that we will see continued concerns about the Chinese slowdown of mining and the fact that the market has gotten far ahead of itself. Bitcoin seems a bit like “dead money” at the moment.