I believe this market will go looking towards the $70,000 level.
The Bitcoin market rallied a bit on Monday but struggled with the $60,000 level. Nonetheless, the 50-day EMA seems to be offering a bit of support, and even though we have formed a little bit of a shooting star, the reality is that the previous candlestick was a hammer, which typically means that the market is probably going to hang about this area before building up enough inertia to make a bigger move. A break above the $60,000 level is what I would anticipate, but we may need to build up enough momentum over the next couple of days.
On the other hand, if we break down below the bottom of the hammer from the trading session on Sunday, then it is possible that we break down below the $55,000 level. At this point, I would not be on the side of panicking, rather I would like an idea of picking up value closer to the $50,000 level. The $50,000 level is a large, round, psychologically significant figure, and I think a lot of orders are waiting to get involved in that area. Even if we break down below there, the 200-day EMA is sitting right around the $46,000 level, and it is a technical indicator that a lot of Bitcoin traders will get involved in.
It is not until we break down below the 200-day EMA that we are technically “in a downtrend”, so it is very unlikely that we would see significant selling in this market until we get below there. If we do, then the market is going to get very brutal and ugly, but from a longer-term standpoint, I believe that is what you should be hoping for, because you will be able to buy Bitcoin at a much cheaper price. That is the least likely of outcomes though, because I think that there are far too many institutional traders out there willing to get involved to keep it from breaking down like that again. The market has matured, so it is going to start behaving a lot more like other markets, meaning that you will not be seeing 20% drops as often as you used to. I believe this market will go looking towards the $70,000 level.