The Bitcoin market rallied a bit on Wednesday as we continue to consolidate in the same general vicinity. Ultimately, this is a market that I think will continue to see a lot of noisy behavior, so I think we should see more of this back-and-forth behavior than anything else. The $20,000 level would obviously be a bit of a magnet for the price; therefore I think we have a situation where we would see the market go back and forth.
The $22,000 level is an area where we would see a lot of resistance, with a 50-day EMA sitting just above causing a bit of resistance. The markets will continue to see a lot of noisy behavior, so I believe it is only a matter of time before any rally gets sold into as it has been beaten up, and it’s also a market that has a lot of concerns due to the fact that the US dollar is going to continue to strengthen.
The $18,000 level underneath offers a bit of support, and if we can break down below there, then I believe that Bitcoin could go down to the $12,000 level, which is a longer-term target for quite a few people. I believe that we could very well go down there, but a lot of that will come down to the US dollar and whether or not it continues to strengthen. I do believe that it is only a matter of time before any rally gets sold into because of the overall momentum of the market.
That being said, it is worth noting that Bitcoin is going to continue to lead the way for the rest of crypto, so we do need to keep in mind that it is likely that we will see Bitcoin outperform the rest of the markets, but in a relative sense at best. Ultimately, this is a market that I think continues to limp along, so I think if you are a longer-term holder of this market, you probably need to think of this through the prism of building a larger position. Ultimately, this is a market that I think continues to struggle for momentum, but I also recognize that this can be thought of as potential value by those who are willing to hang on long enough.
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