BTC/USD has initially pulled back a bit during the trading session on Tuesday, but then turned around to show signs of life. Part of this might have been a “knock and affect” from the Forex world, as the Bank of Japan has intervened in the currency markets. By selling US dollars, it has driven down the value overall. This may have tripped a little bit of algorithmic trading, and therefore Bitcoin may have been the beneficiary because of this.
Regardless, this is a market that has nowhere to be at the moment, so this little bit of a move probably doesn’t matter. The 50-Day EMA sits just above at the $20,000 level and dropping. The $18,000 level underneath should continue to offer support; therefore, I think it’s likely that we will continue to see that area as a major target for short-sellers, and if we can break down below there, then it’s likely that we go much lower. A breakdown below the $18,000 level opens up the possibility of a move to the $15,000 level, possibly even the $12,000 level.
If we did break above the 50-Day EMA, it’s very unlikely that we would be able to hang onto those gains for a significant amount of time. In fact, it’s not that we break above the $25,000 level that I would be a buyer of Bitcoin.
- Keep in mind that monetary policy remains very tight, so therefore it does make a certain amount of sense that there will be no real interest in trying to take a lot of risk with your trading capital.
- Bitcoin is about as risky as it gets, especially when it comes to institutional traders that move the market.
Looking at the daily candlestick, it is a hammer, but really at this point in time we have seen multiple hammers and shooting stars over the last several weeks, so it does make a certain amount of sense that we would continue to see a lot of choppy and volatile short-term trading. In fact, unless you have the ability to day trade this market, there probably is in a whole lot to do. With this, crypto winter continues to be a major influence on these markets, and therefore I would not expect much coming out of this market along the lines of a major bull run.