I do not think that Bitcoin is going to go to zero, but I do need think that it is going to continue to struggle in this environment, as money is no longer cheap, and therefore people are not looking to buy a lot of risky assets such as Bitcoin.
- The BTC/USD has done almost nothing during the trading session yet again during the day on Friday, as we are sitting just below the 50-Day EMA.
- This is a market that sits on top of the $18,000 level, which is a major support level. If we can sit above there for a while, then we have the possibility of grinding sideways to try to stabilize the market.
- However, it’s interesting to see that the markets have been quiet, but you also must think about the fact that the market had sold out so brutally to get down here, it does make a certain amount of sense that we would see a lackluster performance.
If we break down below the $18,000 level, it’s likely that the market could unravel and go down to the 15,000 level. The 15,000 level with a large, round, psychologically significant figure, but we look at the historical charts of Bitcoin, it’s not necessarily a major level. Underneath there, the $12,000 level will be crucial, as it was where we had taken off from previously. A revisit of the $12,000 level would be a complete “round-trip” in this market, and therefore I think a lot of people would be interested in dipping their toe in the waters near that level.
Bitcoin Likely to Continue Struggling
I do not think that Bitcoin is going to go to zero, but I do need think that it is going to continue to struggle in this environment, as money is no longer cheap, and therefore people are not looking to buy a lot of risky assets such as Bitcoin. In fact, it’s not just a Bitcoin thing, it’s a risk asset thing. If the US dollar continues to strengthen overall, it’s going to continue to work against the cryptocurrency market. Ironically, Bitcoin desperately needs the Federal Reserve to loosen its monetary policy and bail it out, and until that happens, Bitcoin is going to have no real chance of rallying for a bigger move that is sustainable. The 50-Day EMA continues to be a resistance barrier, and therefore I think it can almost be thought of as a downtrend line. Even if we break above there, we will have to clear the $25,000 level to make a serious statement of intent to go higher. Ultimately, it’s likely that we are going to continue to see a great buying opportunity, but that’s a much longer-term scenario.