The BTC/USD has broken down to test the $1900 level, and it looks as if we are going to continue to see Bitcoin fall apart. The $19,000 level is a significant support level that people have paid close attention to, so if we were to break through that area, it’s likely that Bitcoin will start looking to go down to the $17,500 level, perhaps even down to the $15,000 level.
The $20,000 level above is an area that could offer a little bit of short-term resistance, but it’s only the first place that we would see the sellers come in to put pressure on the market. After that, we have the $21,500 level, which has shown a little bit of resistance previously, and then of course the 50-Day EMA is sitting in that same general vicinity. After that move, then you would have to worry about the $24,000 level. It’s not until we break through all that noise that the market could start to take off again.
Risky Assets Likely to Keep Falling
- The biggest problem with Bitcoin right now is that the monetary policy is tightening in the United States, and that of course is going to have a detrimental effect on risk appetite in general.
- With that being the case, it’s likely that we will continue to see Bitcoin and other risk assets like it suffer at the hands of fear.
- Institutional money is avoiding Bitcoin quite drastically, and I think that continues to be the case going forward.
The size of the candlestick is rather negative in comparison to the last couple of weeks, and the fact that we are closing toward the bottom of the candlestick also suggests that there may be a bit of follow-through just waiting to happen. In this scenario, I think you have a situation where Bitcoin is ready to break down. I just don’t have any interest in trying to buy Bitcoin now, because I think we have far too much risk aversion out there to have people going this far out into the spectrum. Furthermore, the US dollar is strengthening, and of course, Bitcoin is measured in those very same US dollars. Fading short-term rallies should continue to be the best way the market is traded, and it’s likely that we will continue to see this type of momentum be the norm.
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