The Bitcoin market rallied just a bit on Wednesday but gave back the gains to drift towards the $41,300 level again. The 200-day EMA sits just below, sitting right at the $40,000 level. The $40,000 level is a large, round, psychologically significant figure. This is an area that will attract a lot of attention, and I think it makes sense that there would be buying pressure.
Having said all of that, if we were to break down below the $37,500 level, then it is likely that we will really start to move much lower. At this point, the $35,000 level will be a target, followed by the $30,000 level. After the price action of the last couple of days, it certainly makes sense that we will test the lows, and perhaps really fall from here. Rallies continue to get sold off at lower levels, with the 50-day EMA above offering a significant amount of resistance.
The market breaking above the 50-day EMA could open up the possibility of a move towards the $48,000 level, which is an area that has seen a lot of selling pressure. Because of this, I think it will be difficult to break above there, but if we do get above there, the $52,000 level above would be the next target. That is where a lot of the selling pressure has occurred, and it certainly looks as if we are still going to favor the downside at least in the short term.
I think that crypto in general has a bit of a move to the downside just waiting to happen, and Bitcoin will lead the charge. That being said though, if we do turn around and take out the 50-day EMA to the upside, then it is likely that not only Bitcoin will rally, but alt coins will as well. This market has been very choppy over the last couple of weeks, and it suggests that the market is still trying to figure out what to do next, but the fact that we are making lower lows over the last couple of days means that the market is “whispering” that we will go lower.