Bitcoin fell again on Monday as we continue to see people run away from risk in the overall markets. Because of this, Bitcoin does not have much of a chance to gain, and probably will not anytime soon. The market is currently in the midst of consolidation, so it is worth paying attention to the areas of interest. This includes the $46,000 level, and then the $35,000 level underneath.
The market is either trying to kill time, in order to at least see some stability, or it is going to continue to suffer at the hands of tightening monetary policy. Central banks around the world, most importantly the Federal Reserve, are getting ready to tighten into a slowdown. If that is going to be the case, it is going to be a huge mistake for economies, and it most certainly will have people moving away from riskier assets such as Bitcoin and technology stocks, both of which tend to move in tandem.
Although Bitcoin is supposed to be outside of the normal sphere of influence, the reality is that so much institutional money has come into crypto that it is starting to behave as tech stocks did in the 1990s. This will more than likely continue to be the case, so I am not a big fan of Bitcoin right now. If you are a longer-term holder, then it is possible that you could be seeing some type of buying opportunity, but I also believe that you have plenty of time to get involved. If Bitcoin breaks down below the $34,000 level, it is more likely than not that the $30,000 level will get targeted rather quickly.
The Bitcoin market would have to break above the $45,000 level to give the “all clear” for a longer-term move to the upside, something that simply does not seem likely to happen anytime soon as every time we have tried to rally, Bitcoin has been stepped upon. Unfortunately, I think that is going to be the case for the foreseeable future, so even if you are a longer-term holder, you are more likely than not going to have plenty of time to build up a position. Ultimately, this market will eventually turn around, but we may have quite a bit of destruction before that actually happens.
