The Bitcoin market has initially rallied during the course of the trading session on Monday but gave back quite a bit of momentum just below the $49,000 level. The $50,000 level is an area that of course would attract a lot of attention from a psychological standpoint, and it is an area where we had seen a lot of selling pressure previously.
Looking at this chart, you can see that we crashed through the 50 day EMA to show signs of negativity. However, the market has also seen a lot of pushback, so I think at this point it is likely that the Bitcoin market is going to continue to be very choppy and noisy to say the least. The $40,000 level underneath of course is a large, round, psychologically significant figure and an area where we have the 200 day EMA sitting. Because of this, I think the $40,000 level will continue to be important, not only due to the psychology of the figure and the 200 day EMA, but also because it was a scene of clustering previously, and the top of a consolidation range.
The market breaking down below the $40,000 level would be an extraordinarily negative turn of events, opening up a move down to the $35,000 level, even $30,000 after that. That would obviously be a very negative turn of events, and at that point in time we would have to take a serious look at what was going to happen next with Bitcoin. Alternately, if we could break above the $52,000 level, then it allows the overall uptrend to continue, perhaps opening up the possibility of a move towards the $60,000 level. In general, this is a market that I think continues to be very noisy, but we are still very much in an uptrend. Whether or not we need to pull back further is a completely different question, but even if we do I think there are plenty of buyers who are willing to get involved at that point. As far as selling is concerned, I have no interest in doing so anytime soon, but I do recognize that if somehow, we turn around a break down below the $30,000 level, the market would fall apart and be extraordinarily bearish at that point in time. Keep in mind that Bitcoin does tend to be very noisy, so do not be surprised at all to see a lot of volatility.
