Bitcoin rallied again during the trading session on Wednesday as the market continues to look at the $40,000 level as a major barrier above. At this point, the $40,000 level is not only a large, round, psychologically significant figure, but an area that obviously has a lot of built-in resistance. It is interesting that we did find support at the 50-day EMA, so that is a very bullish sign. We are stuck between resistance and the 50-day EMA, so it does suggest that we are still going to continue seeing this is an area of consolidation.
Bouncing at the 50-day EMA was the best thing that could happen for the bullish Bitcoin traders, because if we were to turn around and break down through that level, it is likely that we could go looking towards the $30,000 level underneath. The $30,000 level has been massive in its support and is also an area that we need to pay close attention to. The $30,000 level has held itself supported multiple times, and as a result, it is likely that the level will attract quite a bit of volume. If we were to turn around and break down below the $30,000 level, then it is likely that the market will go looking towards the $20,000 level after that.
Keep in mind that the consolidation area that we have been bouncing around in measures $10,000, so it makes sense that the market will either break out to the upside and target the $50,000 level, or break down a bit to reach towards the $20,000 level. Either way, we are on the precipice of a significant move, so I think it is worth paying close attention to this market because a nice $10,000 move is just waiting to happen. However, if we were to see more sideways action between now and the jobs number, that might not be a huge surprise. Ultimately, Bitcoin will make its move, but at this point you also have to pay attention to the US dollar as it is the other side of the equation. The 200-day EMA is flat, suggesting that the longer-term trend is still trying to figure out what to do.
