The Bitcoin market initially tried to rally on Wednesday but gave back the gains a bit. It is not necessarily an impressive or even important reversal, it just shows that the $50,000 level will continue to have a significant amount of psychology built into it. At this point, if we can break above the $51,000 level, it is at that point that I am willing to get long Bitcoin again. If we were to break through that, I suspect that the first target would be the 50 day EMA, but I would be looking for a much bigger move, perhaps even as high as $60,000 over the next couple of sessions after the breakout.
To the downside, the 200 day EMA sits just above the $47,000 level, so that is something worth paying attention to, and if you are a range-bound trader perhaps you can find some type of indicator for your charts that can tell you overbought an oversold conditions such as the stochastic oscillator.
If we were to break down below the $44,000 level, then I think you probably have to stand to the side and let Bitcoin crush itself for a little bit, opening up the next possible support area at the $40,000 level. Any break below that could really get aggressive to the downside, but right now it looks like we are more interested in stabilizing around the crucial 200 day EMA then we are trying to continue this selloff. I suspect that there is a lot of noise above, but quite frankly we all know how crypto moves, meaning that if and when it takes off, it is just going to shoot right through all of those areas. The Bitcoin market will get a certain amount of a boost after the year, because traders will be done doing their end-of-the-year selling to deal with taxes, and of course when traders come back from the holiday they will be looking to invest in something. Bitcoin was a great asset for most of the year, and I think it will continue to be so going forward. Expect a lot of choppy sideways action, but I do think eventually we will break to the upside and go looking towards the $55,000 level somewhat quickly. Keep in mind that at the end of the year there will be some liquidity issues, so keep your position size readable.
