The Bitcoin market rallied a bit on Tuesday, gaining ever so slightly to break above the $50,000 level. The $50,000 level is an area that will attract a lot of psychology, and it is worth noting that headline numbers do tend to have a major effect on Bitcoin in general. This is perhaps due to the fact that so much of the volume in Bitcoin is done from the retail side.
Just above, we have the 52,000 level which has offered significant selling pressure previously, where we started the big pullback. I think that area will more than likely offer a bit of trouble, so do not be surprised at all to see this market stumble a bit in that general vicinity. That being said, I also expect that Bitcoin will eventually take out to the upside, because that seems to be where the momentum is pushing us. Even if we did pull back from here, I can think of several places where I would anticipate seeing a bit of value hunting.
The $48,000 level has been important previously as resistance, and I think the market pulling back towards that area should offer support, but even if we break down below there then I believe that the 50-day EMA comes into the picture near the $45,000 level. After that, there is a significant support level near the $40,000 level, especially as the 200-day EMA sits right in that same vicinity. In other words, there are multiple areas where a lot of traders will be willing to get involved in this market. In fact, it is not until we break down below the $40,000 level that I would be concerned.
Even on a breach of the $40,000 level, it is really not until we break down below $37,500 on a daily close that I would be concerned about the longer-term trend. At that point, it opens up a big move towards the $30,000 level where I would anticipate a lot of value hunting there as well. If that were to somehow get sliced through, it would be a disaster forBbitcoin. That being said, that is roughly a 40% correction, so clearly that is not going to happen in the next 24 hours.
