Bitcoin has fallen a bit during the trading session on Monday to break below the $39,000 level initially. However, we did bounce ever so slightly at the end of the day. If we break down below the bottom of the candlestick for the Monday session, that is likely we go looking to reach the $37,500 handle. That is an area that has offered support multiple times, so it of course is important to pay close attention to.
If we were to break down below that level, then I think it is possible that we could go down to the $35,000 level, which breaking below there then opens up significant selling pressure and perhaps even the possibility of kicking off “crypto winter.” The market has been very noisy for quite some time, and therefore it is likely that we will continue to see a lot of choppy behavior.
Turning around opens up the possibility of an attempt on the 50 Day EMA, which is sitting at the $42,500 level. The market then has to deal with the $44,200 level, where the 200 Day EMA sits. Breaking through all of that could open up the possibility of a move higher, perhaps even trying to get back to the $50,000 level. The $50,000 level of course is a large, round, psychologically significant figure, and I think would offer a bit of a “ceiling in the market.”
The only thing I think you can count on in the Bitcoin market is a lot of choppy volatility. After all, the market has been noisy for quite some time, and therefore I think we will continue to see more or less a sideways market, which shows a lot of indecision. The question now is whether or not the consolidation leads to continuation, or if it is a turnaround to show signs of strength.
Keep in mind that the Bitcoin market is highly sensitive to risk appetite due to the fact that Bitcoin is such a volatile asset. Until we get stability in some of the more traditional markets, it is difficult to imagine that the Bitcoin market will be able to find stability as well. The candlestick does suggest that we could go lower, but I also recognize that there is a lot of support just below that will come into the picture. Expect noise, nothing more, nothing less.
