Exhaustion will more likely than not end up being a selling opportunity.
- Bitcoin has rallied significantly during the trading session on Wednesday as we are now threatening the $21,000 level.
- Part of this might be the fact that the United Kingdom is now looking to regulate crypto, as well as the possibility that the US dollar has fallen rather significantly.
- The market had been very quiet until now, but we still have a lot of resistance above that market would have to overcome.
Selling Opportunity Ahead
Because of this, is very likely that we will eventually see exhaustion. Then exhaustion will more likely than not end up being a selling opportunity, although it is worth noting that there is a major support level underneath. When you look at the candlesticks of the last couple of days, it is very bullish, but at the end of the day there is still a lot of resistance just above, especially near the $22,500 level, and then again at the $25,000 level. The $25,000 level would be very difficult to overcome, but if we did break above there, then it’s likely that Bitcoin would continue to go higher. Quite frankly, I think this is very unlikely, due to the fact that the 200-Day EMA is there as well, and of course there are a lot of concerns about risk appetite.
Unfortunately, Bitcoin is pretty far out on the respect and, therefore you need to be aware of the fact that the markets can change at any moment, especially in this environment where we have central banks around the world tightening monetary policy, despite the fact that the Bank of Canada raised rates less than anticipated during the session, and that keeps risk a bit difficult to hang onto for longer-term moves.
Quite frankly, if we do see a major trend change, it typically takes quite a while to do so, and therefore I think you get a situation where you have plenty of time even if we do break to the upside. Breaking above the $25,000 level would confirm all of this, but do not be surprised at all if we continue to go back and forth in the bigger consolidation area that we have been in. More likely than not, that will end up being the result, but only time can tell, so looking at the daily close on the chart will give us a bit of a “heads up” as well.