Bitcoin Forecast: Buyers Based on Value

The BTC/USD market has fallen significantly during the trading session on Friday, losing over 7% as the market is now approaching the $21,000 level. The 50 Day EMA has been left in the rearview mirror, and now it looks like we are very likely to see Bitcoin drop down to the $20000 region quite quickly.

  • The $20,000 level has a certain amount of psychology attached to it, and it would also cause a lot of noise.
  • That’s an area where we had seen a lot of support previously, so that is an area where you would anticipate there should be some buyers based upon value. 
  • If we were to break down below that level, it’s likely that the market would probably drop down to the $12,000 level. It is at the $12,000 level that a lot of people believe that the market will bottom.

The $12,000 level is where we broke out from previously, so it would be a complete round trip for what we had done during the last bullish move, and at this point, I think it would not be a huge surprise to see that happen. The $25,000 level had been a major resistance and psychological barrier, and the fact that we have pulled away from it so quickly now, suggests to me that there is going to be some follow-through. After all, the market continues to see a lot of risk appetite being eviscerated, and that is horrible for Bitcoin. After all, Bitcoin is pretty far out on the risk spectrum, and therefore times have to be good in order for Bitcoin to continue going higher.

The size of the candlestick does suggest that we have much further to go, and with that being the case, it’s likely that we will try to see plenty of sellers willing to step into this market at the first signs of exhaustion. I think the US dollar is going to continue to cause major issues, and as long as that’s going to be the case, nothing is going to get in its way, including cryptocurrency. Bitcoin is likely to take a punch in the face over the next couple of weeks, but if we were to turn around and rise above the $25,000 level, it would be a complete change of scenery, opening up a potential move to the $20,000 level.

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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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