- The BTC/USD has rallied a bit during the trading session on Thursday, reaching the crucial $18,000 level.
- This is an area that has been important for quite some time, so does make a lot of sense that we would continue to see that area attract attention in both directions.
- “Market memory” comes into the picture, as it was so important previously. With that being the case, I think it probably continues to see a lot of back-and-forths, but if we cannot stay above the $18,000 level, then it’s very likely that we see this market continue dropping.
After all the drama surrounding FTX, it’s not a huge surprise to see that bitcoin has been beaten. I think we also have a situation where you have to look at this through the prism of whether or not the US dollar is going to continue to fall apart. I don’t necessarily think that’s going to be the case, so it’s very likely that we have a scenario where the Bitcoin market has a very limited reprieve that a lot of people will be more than willing to take advantage of.
Negativity Ahead
Ultimately, this is a situation where I think more negativities come, but I cannot give you the exact reason. I think simple momentum will continue to be a major problem. With the 50-Day EMA sitting at the $20,000 level, and now offers a significant amount of psychological resistance.
If we turn around and break down below the bottom of the $16,000 level, then I think bitcoin continues to fall apart, reaching down to the $15,000 level, and then eventually the $12,000 level, making it a complete “round-trip” from the initial breakout that we had seen for so long. Ultimately, this is a situation where we will probably have a lot of noise that we have to deal with, but over the longer term, I think we are about to make a much bigger move. Once that happens, it will become much clearer, but in the short term, I think we’ve got to look at this through the prism of a relief rally, and not much more than that. Feeding rallies will more likely than not continue to be the way forward, even though the situation during the trading session on Thursday was so one-sided.
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