The Bitcoin market initially tried to rally on Friday but gave back early gains to form a shooting star. This is a market that continues to see a lot of volatility, as the $40,000 level has been a short-term resistance barrier. Furthermore, it is likely that the 50-day EMA underneath offers a nice target for value hunters to jump in and take advantage of that. The market will be influenced by a lot of different factors, but right now Bitcoin is running into a lack of momentum.
If we do pull back from here, the 50-day EMA makes as support near the $44,400 level. The 50-day EMA has been supportive a couple of times previously, so it is worth paying close attention to that indicator. As long as we stay above there, though, I feel that you should be a buyer of dips. After all, there does seem to be more or less a “buy on the dips” type of situation. That being said, the strength of the US dollar has had its part to play, but also worth mentioning is the fact that Bitcoin has been in an uptrend until recently.
The massive candlestick that sent this market lower is still difficult to overcome, so if we can break above that I think that the market could go much higher. The $52,000 level being broken above offers the opportunity for the market to go all the way to the $60,000 level. On the other hand, if we do break down below the 50-day EMA, then it is likely we go looking towards the $40,000 level underneath where the 200-day EMA sits.
Bitcoin continues to be very choppy, but that is nothing new for anybody who has traded this market. Furthermore, the market is likely to continue to see a lot of that behavior as we have seen alt coins get hammered. The market breaking down below the $40,000 level could change the overall attitude though, so it is worth paying close attention to that level. If we were to break down below there, it is likely to send the market much lower. That is unlikely, but it is a possibility that you need to keep in the back of your head.
