BTC/USD Forecast: Bitcoin Gives Up Gains at 200-Day EMA

Christopher Lewis

Crypto just looks too beaten down, as if it is simply trying to catch its breath after the extreme moves earlier this year.

Bitcoin got absolutely hammered during the trading session after initially trying to rally on Monday, as we have lost over $3000 rather quickly. The 200-day EMA currently sits at the $36,566 level, and it appears to be acting as a bit of a “brick wall” in this market, if the last couple of weeks are to be believed. Because of this, the market then could go much lower if we break down below the $30,000 level.

Breaking down below the $30,000 level opens up the possibility of a move down to $20,000, based upon the consolidation area that we are in being $10,000 “tall.” With this, you can also make an argument that if we break above the $40,000 level, the market is likely to go looking towards the $50,000 level based upon that same measurement. Regardless, this is a market that is rather noisy and choppy, so I think you need to pay close attention to the box that we have been trading in and keep your position size relatively small as we try to figure out where we are going next.

Bitcoin continues to face a lot of headwinds due to the fact that the Chinese are shutting down mining, and it had been overbought for most of the year. Now the question is whether or not we can continue to hold in this area, or if we will continue a move to the downside. I think that because the last couple of weeks have really struggled to get to the top of the consolidation, we will more likely than not see this market break down rather significantly. With that in mind, I like the idea of shorting this market on the breakdown, and I believe at this point in time we will eventually get the opportunity to start selling. In general, this is a market that I think will continue to see a lot of noisy behavior, so if you are looking for a bigger move, you probably have to wait a significant amount of time to get there. Crypto just looks too beaten down, as if it is simply trying to catch its breath after the extreme moves earlier this year.

BTC/USD

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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