BTC/USD Forecast: Showing Signs of Hesitation

Christopher Lewis

I continue to look at this as a “fade the rally” situation.

Bitcoin fell on Wednesday to reach the $20,000 level yet again. Ultimately, you should pay attention to the fact that we did of forming a bit of a shooting star during the previous session. At this point, if the market were to break down below the hammer from the candlestick before, then it’s likely that the market could go down to the $18,000 level. The Bitcoin market looks very sick, and I don’t think that changes anytime soon.

Alternately, if we were to break above the shooting star from the Tuesday session, that would be a bullish sign, as we would be breaking above the 22,000 level, perhaps trying to get to the $23,000 level. A break above that level then opens up a significant “bear market rally” that could go all the way to the 50 Day EMA. That currently sits near the $28,000 level, so therefore that could be where we end up on some type of bullish news. The biggest problem of course is that there is not much in the way of bullish news.

Looking at this chart, it remains a “sell on the rallies” type of situation, as the entire crypto area is going to continue to be toxic. After all, the risk appetite of traders around the world has been decimated, so there’s nobody out there willing to put a lot of money into the market on the whole. Bitcoin is the only chart that matters at this point, because if the market starts to rally, then possibly some of the smaller markets could start to rally as well. That being said though, I would need to see Bitcoin break above the $30,000 level on a weekly close to believe that the trend has changed.

The signal that the Bitcoin market may look for in order to start rallying is the Federal Reserve looking to change its tight monetary policy. If they do, then it’s possible that Bitcoin can recover. However, until that happens it’s very unlikely that Bitcoin has any real momentum. With that in mind, I continue to look at this as a “fade the rally” situation. If we break down below that $18,000 level, then $16,000 will be targeted, and eventually $12,000, which is my longer-term target.

BTC/USD

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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