Bitcoin has rallied again during the trading session on Wednesday, to show signs of recovery yet again. The market reached towards the $40,000 level, breaking above a short-term resistance barrier. This is a good sign, suggesting that we are ready to attack the $50,000 level quickly. The $50,000 level is a large, round, psychologically significant figure that a lot of people will be paying attention to, so keep that in mind as well.
The size of the candlestick that broke back down below the $50,000 level last week shows that there is a lot of supply up there, but quite frankly this is a market that has been in an uptrend and now that we have pulled back to the 50 day EMA to show signs of life again, it suggests that this market is going to continue to go higher based upon the longer-term uptrend. The neutral candlestick that hit the 50 day EMA was the turnaround, which makes quite a bit of sense. This is a market that has continued to attract a lot of attention on every dip, and this last couple of days has been no different.
With interesting is that the US dollar is showing signs of life, despite the fact that Bitcoin continues to climb. While the denominator of this currency pair is the US dollar, that does not necessarily mean that a falling US dollar automatically pushes Bitcoin higher and vice versa. Nonetheless, it certainly does not hurt if the greenback gets beaten up in the Forex markets. Right now, that is not the case and it looks like people are simply trying to get away from danger in general, using Bitcoin as a bit of a safety net.
Regardless, this has been a nice pullback that has allowed buyers to pick up a little bit of value, something that traders in an uptrend always like to see. If we can take out the top of the candlestick from last week, meaning the roughly $52,000 region, then it allows Bitcoin to go looking towards the highs again. I do think at this point we will eventually get there, but that does not necessarily mean that it is going to be easy. Regardless, I do not see a scenario where you would be a seller of this market, as it has been so strong for so long.
