BTC/USD Forecast: Bitcoin Rallies From Potential Base

Christopher Lewis

Given enough time, we have to decide whether or not the $40,000 level is going to be the bottom?

Bitcoin markets have bounced a bit during the trading session on Thursday to gain a little bit over 3%. By doing so, the market looks as if it is trying to continue this potential base, with a fairly significant amount of attention being paid to the $40,000 level. The $40,000 level has been supportive and of course is a large, round, psychologically significant figure that a lot of people will pay attention to. Because of this, you can expect a lot of noise in this general vicinity. Given enough time, we have to decide whether or not the $40,000 level is going to be the bottom?

To the upside, the $44,000 level has been somewhat difficult as of late, and if we can get above there it would most certainly be a victory for the bulls. Breaking above that level could open up a move towards the 200 day EMA rather quickly, which currently sits at $46,626. After that, then we could be looking at a move towards $50,000. All of that being said, I do recognize that the 50 day EMA is trying to break down below the 200 day EMA in order to form the so-called “death cross”, but that is an indicator that I do not put too much merit into, as it typically is late. Because of this, I think some longer-term traders may get this wrong and had defined themselves short covering yet again.

Bitcoin of course has been bullish for quite some time, and I think that will continue to be the case despite the fact that the last couple of months have been a bit rough. We have had a significant pullback to an area that has been supportive in the past, so it does make a certain amount of sense that there would be a lot of position building in this general vicinity. I think this could be very noisy, that I have no interest in shorting Bitcoin, and I think it is probably only a matter of time before longer-term trader step into the action and continue to build their position. All things being equal, this is a market that I think has much further to go and therefore you could do quite well by showing a certain amount of patient, just simply understand that the crypto markets tend to be very volatile so leverage is a necessary.

Bitcoin chart today

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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