Bitcoin markets fell a bit on Friday but found enough support just above the 40,000 level to turn around and sit right at the 200 day EMA. The candlestick for the session ended up being a bit of a hammer, and it is a good look for a market that is trying to find some type of stability. The fact that we held here and at the $45,000 region and the 200 day EMA suggests that there is stability coming into the market, and that it is probably only a matter of time before we bounce a bit from here. If we can turn around and rally, then we need to pay attention to the $51,000 level above.
It is on a break above the $51,000 level that I think this market has the ability to go much higher. At that point, the market would probably go looking towards the $60,000 level, which is the next large, round, psychologically significant figure, and an area where we had seen a lot of selling pressure previously. On the other hand, if we turn around and break down below the $45,000 level, we will have not only broken through a psychologically important figure, but also through the 200 day EMA, and of course the bottom of a hammer. All of those are very bearish signs to say the least, but that simply makes me look at the $40,000 level as the next potential buying area.
Over the last 24 hours I have heard a couple of “experts” suggest that crypto was going to zero. It is generally when these people get the loudest that you are getting the closest to the end of the selloff. Granted, that is somewhat anecdotal, but there is a certain rhyme and rhythm to the way these markets move. I am simply waiting to see whether or not we can recapture $51,000 above on a daily close, and then I will not hesitate to start buying again. On the other hand, if I have to wait and buy more down at the $40,000 level, I am happy with that as well. I am a longer-term holder, which I think is the only real way to make money in crypto because it is so volatile. Nonetheless, you will notice I did mention anything about shorting.
