Bitcoin initially tried to rally on Thursday but gave up what minuscule gains it happened to come up with. The market looks as if it is stuck like a magnet to the $30,000 level, an area that has a lot of psychology attached to it. The market continues to look at the market with our very real lack of interest, and I think that leads to a more likely move to the downside. The $28,000 level underneath should offer short-term support, but it looks like we are more likely than not going to break down below there given enough time. I say this because we simply cannot get off of the mat, and at this point, there seems to be no hope of that.
Even if we do break to the upside, the 50 Day EMA sits just above that $32,000 level, opening up the possibility of a move to the $37,500 level. After that, then there are a lot of concerns near the $40,000 level where the 200 Day E EMA currently sits. This is a market that more likely than not has further to go to the downside, so when we break below the $28,000 level, it’s likely that we go looking to the $25,000 level. After that, it’s likely that we will see the market go down to the $20,000 level. After that, then it opens up a move to the $12,000 level, making it a “round-trip” from the move higher that Bitcoin just completed.
We are almost certainly in “crypto winter” at the moment, and it looks like there’s no real hope of anything changing. The Federal Reserve is going to tighten monetary policy, and that destroys risk appetite. Ultimately, the market is likely to continue seeing a lot of negativity, therefore given enough time the sellers will overwhelm the buyers. Don’t get me wrong, I do not think that Bitcoin is going to zero, but there are a lot of crypto markets out there that will.
This looks a lot like the 1999 technology bust, where a lot of high-flying technology stocks got decimated. I think the same thing is about to happen to crypto, which is actually good for the future of crypto because it gets rid of a lot of the nonsense and froth in the market that has been so prevalent.
