BTC/USD Forecast: Bitcoin Continues to Struggle

Christopher Lewis

I think that the market is going to continue to see downward pressure, so buying Bitcoin is probably the least prudent of actions.

Bitcoin markets rallied just a bit during the trading session on Friday but gave back the gains to form a less-than-impressive candlestick. It is a bit of a shooting star, but the range was so small that I would not be overly concerned. At this point, the market is trying to figure out whether or not the recovery on Wednesday is real, which does not look likely to be the case. Remember, the $30,000 level has been significant support for a while, and as a result I think that the bounce not having any follow-through tells us quite a bit about what is going to happen next.

If we can break down below the $30,000 level on a daily close, it is likely that the market will continue to drop towards the $20,000 level as the consolidation area measures $10,000, and the math works out to that round figure. Furthermore, the $20,000 level is an area that is not only a large, round, psychologically significant figure, but it is also an area where we had peaked during the last Bitcoin bubble. I think there is a certain amount of “market memory” in that area, so I would not be surprised at all if it offered support. If we break down below the $20,000 level, it is very likely that we would enter a “crypto winter”, which is when the markets are simply lost without any type of significant demand.

To the upside, if we were to break above the top of these couple of candlesticks, the market is likely to go looking towards the 200-day EMA which is at the $36,000 level. Furthermore, the 50-day EMA getting ready to cross the 200-day EMA is essentially the “death cross”, which is a very negative sign. In general, this is a market that I think is eventually going to break down, but if we were to break through those couple of EMAs, then the market is likely to go looking towards the $40,000 level. Ultimately, I think that the market is going to continue to see downward pressure, so buying Bitcoin is probably the least prudent of actions. If nothing else, I would be on the sidelines, but if I had to put some money to work, it would probably be shorting the market.

 

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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