Bitcoin rallied a bit but gave back some of the gains to show signs of hesitation. I find this particularly interesting as we had just broken out above a short-term consolidation area. Whether or not we can continue to go higher is a bit of an open question, especially with the $40,000 level above looming large. Nonetheless, it is likely that we will continue to see a lot of noisy behavior, and a pullback is probably somewhat expected. That does not necessarily mean that the market is done going higher, just that we may need to build up a little bit of accumulation in order to see the move higher.
There are a lot of risks out there currently, so it makes sense that Bitcoin is being shunned. We also have just had the “death cross”, when the 50 day EMA cracks below the 200 day EMA, forming a very bearish longer-term signal. Whether or not you believe in that signal is a completely different question, because it comes far too late. That signal would have been a little bit more helpful somewhere near $60,000 instead of all the way down here. Nonetheless, it does look like we are getting a little bit of a pushback in the short term, so I think a pullback is going to be facilitated sooner rather than later.
To the downside, I believe that the $35,000 level will be supportive, and then after that we will see an attempt to get down to the $30,000 level. The $30,000 level I think needs to hold for Bitcoin to have any hope, because underneath there is more likely than not that we get set in for “crypto winter.” This is when crypto markets do almost nothing, and only the true faithful out there accumulating. That will be exactly what I am doing this time around because I will not miss the pop from those levels. I think it is too early to worry too much about it, but it is a possibility that you need to keep in the back of your mind. To the upside, if we can break above the $42,000 level, I think that would be an extraordinarily bullish sign and could send Bitcoin much higher. In fact, it could change the trend.
