The Bitcoin market rallied a bit on Friday only to turn around and show signs of exhaustion. That does make sense, because the market went straight up in the air. You cannot go in a 90° angle for very long, so it's understandable that we would see a pullback at this point. Furthermore, the $55,000 level would have a certain amount of psychology involved in it, so I think a pullback is normal.
The $50,000 level underneath could be a support level based upon the psychology if nothing else, as it will attract a lot of headline attention. The market breaking above the top of the shooting star could open up the possibility of a move towards the $60,000 level, but I do not like that trade right away, because at the very least we need to chew and digest some of this excess bullish momentum. Because of this, the market is likely to see either sideways action or a short-term pullback, both of which would be very bullish for the Bitcoin market overall.
The 50-day EMA is sitting just above the $45,000 level and curling higher. If we were to reach towards the $50,000 level with that 50-day EMA, it would be yet another reason to think that area would offer a bit of support as well. If we do not pull back, then grinding sideways makes sense, perhaps as the $55,000 level could offer significant resistance. If we were to break above that, that is what would kick off yet another move higher; but like I said previously, I do not like the idea of simply breaking from here.
Bitcoin has rallied in the face of the strengthening US dollar overall, so that shows there is real interest in this market, not just simply a knock-on effect from a weakening greenback. That is a good sign for crypto, and at this point I think you may see a little bit of a rotation from Bitcoin into some of the alt coins in the short term, simply because it has run so far to the upside in such a short amount of time.
